How does relative market power in funding and lending shape bank interest rate risk exposure and monetary transmission? We document a novel pricing fact: banks with less rate-sensitive funding charge higher fixed-rate loan spread over variable-rate loans, despite stable funding makes fixed-rate lending an attractive earnings hedge. Greater loan market concentration is associated with higher spreads conditional on funding sensitivity, and a weaker expansion of fixed-rate credit after monetary tightening. We develop a model with depositor search and bank entry in which relative market power governs a tradeoff between expected earnings and earnings risk. Banks can raise expected earnings by restricting fixed-rate lending and sustaining larger premiums, at the cost of forgone hedging and potential losses from adverse rate movements. A calibrated investment extension captures lower premiums and a higher fixed-rate share after a financing-rate increase implies a contraction in aggregate investment. An application shows that greater bank risk-bearing capacity can raise banks' expected earnings and earnings volatility while reducing fixed-rate lending and investment. Banks that can bear more risk become less willing to supply cheap borrower protection. These results link relative market power and bank risk management to monetary transmission.

This paper studies how workers respond to skill-specific technological innovations through investment in training. We construct a novel measure of technological exposure by combining patent texts with O*NET skill descriptors using natural language processing. Linking this measure to UK longitudinal worker data, we find that greater technological exposure increases hourly wages, particularly among highly educated workers and those in non-routine occupations. Exposure also raises participation in training, especially training for future employment opportunities, and increases voluntary employer mobility. We develop a model of multidimensional skill investment under uncertain future skill returns. Higher skill returns provide more resources to pay for training, and allowing training to respond amplifies the output gains from technological change. Greater uncertainty about future skill returns, such as due to the unpredictable labour-market effects of AI, encourages workers to acquire a more balanced set of skills, giving them more flexibility to respond as skill returns change. These findings highlight workers’ proactive investment in skills and pursuit of new employment opportunities as important margins of adjustment to technological innovation..

When a depository bank loses net worth, does it contract its own lending or the funding it provides to nonbank lenders? In U.S. Call Reports, mortgage-backed and other asset-backed securities account for roughly 6% of assets for smaller banks and nearly 15% in for largest banks. I develop a model in which a wholesale claim funds a nonbank lender and serves as a private safe asset for the depository bank that holds it. Small banks hold just enough claims to meet liquidity requirements and cut both forms of lending after a loss. In contrast, large banks absorb a marginal loss of balance-sheet capacity entirely by cutting wholesale funding. In a U.S. banking industry calibration, a 50-basis-point decline in annualised loan returns reduces wholesale funding by about 1.6% on impact, compared with just over 0.5% with a representative depository bank, highlighting the role of heterogeneity in credit supply responses.

Treasury securities provide banks with liquidity and offer savers an alternative to deposits. How does this dual role shape the effect of public liquidity on bank lending? I construct Treasury issuance surprises from within-quarter errors in the Federal Reserve’s Greenbook forecasts of U.S. government net borrowing. Using quarterly bank balance sheets from 1994 to 2019, I estimate lending responses across banks ranked by high-quality liquid assets (HQLA) as a share of total assets. For a 1% increase in government debt, real lending in the most liquid quintile rises by about 1.4%. In contrast, real lending contracts for banks with less HQLA. These preliminary findings motivate a model of how competition for deposits and liquidity requirements shape credit supply.