Giorgia Piacentino

Assistant Professor of Finance, Columbia Business School

CEPR Research Affiliate

Contact Information

Phone: +1 314 475 4695
Email: giorgiapiacentino@gmail.com

CV

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Published Papers

Warehouse Banking, accepted at the Journal of Financial Economics

With Jason R Donaldson and Anjan Thakor

We develop a theory of banking that explains why banks started out as commodities warehouses. Our theory helps to explain how modern banks create funding liquidity and why they combine warehousing (custody and deposit-taking), lending, and private money creation within the same institutions.

The Wall Street Walk when Blockholders Compete for Flows, Journal of Finance 70 (6), 2015

With Amil Dasgupta

Many blockholders are money managers. We show that, when money managers compete for investor capital, the threat of a block sale ("exit") loses credibility, weakening its governance role.

Working Papers

Contracting to Compete for Flows (conditionally accepted at JET)

With Jason R Donaldson

Delegated asset managers frequently refer to credit ratings in the contracts they offer their investors. However, regulators have advised against this. Why? Contracting on ratings is a way for asset managers to compete for flows of investor capital.

Household Debt and Unemployment (R&R JF)

With Jason R Donaldson and Anjan Thakor

Using a competitive search model, we find that levered households protected by limited liability engage in risk-shifting by searching for jobs with high wages but low employment probabilities.  The equilibrium level of household debt is inefficiently high due to a household-debt externality.

Venture Capital and Capital Allocation (R&R JF)

In this paper, I explore the effects of venture capitalists’ career concerns. I find that when firms are backed by more career-concerned VCs, adverse-selection-induced market breakdowns are less likely and price volatility is lower.

Netting

With Jason R Donaldson

Banks hold gross debts without netting them out.  Why?  These gross debts implement valuable contingent transfers via the option to dilute.

Money Runs

With Jason R Donaldson

We present a banking model in which bank debt is traded over the counter like banknotes were in the nineteenth century and repos are today. This focus on bank money creation reveals a new rationale for demandable debt and a new type of bank run, or "money run."

The Paradox of Pledgeability

With Jason R Donaldson and Denis Gromb

We develop a model in which collateral serves to protect creditors from the claims of competing creditors. We find that collateralized borrowing has a cost: it encumbers assets, constraining future borrowing and investment---there is a collateral overhang.

Do Institutional Investors Improve Capital Allocation?

(Largely subsumed by Venture Capital and Capital Allocation)

Intermediation Variety

With Jason R Donaldson and Anjan Thakor

Non-depository financial intermediaries ("non-banks") have a higher cost of capital than depositories ("banks") do, because they do not benefit from government safety nets. How do they still compete with banks?  Non-banks use their high cost of capital as a commitment device not to fund traditional projects, inducing entrepreneurs to innovative efficiently.