Conference Agenda

We analyze how an information communication technology shock resolves information friction in one of the largest and most important consumer credit markets—the residential mortgage market. Using a staggered difference-in-differences approach, we find that broadband Internet access enables consumers to save an average of $180–$738 on broker fees for each loan. This reduction holds economic significance as it represents approximately 1.4% to 5.6% of their annual interest payments. This can (partially) offset the annual broadband subscription fees of $ 444. Our results are robust to various specifications, including instrumental variable analysis. We identify greater bargaining power and reduced search costs as mechanisms behind the fee reductions. Our findings can be readily generalized to other financial markets that exhibit high searching and matching frictions. This study contributes to the growing body of literature exploring the role of technology in financial markets and has important implications for policymakers seeking transparency and competition in financial intermediaries.

We examine the impact of digital payments on the transmission of monetary policy. Leveraging administrative data on Pix, a digital payment system introduced by the Central Bank of Brazil, we find that Pix adoption has diminished banks' market power, making them more responsive to changes in policy rates. Subsequently, we estimate a dynamic banking model in which digital payment amplifies deposit elasticity through the household sector. Our counterfactual results reveal that digital payments amplify the monetary policy transmission by reducing banks' market power -- banks respond more to policy rate changes after Pix. We find that digital payments impact monetary transmission primarily through the deposit channel.

We exploit a nationwide introduction of mandatory disclosure of borrowers’ total credit exposures and show that sharing such information increases credit access independent of borrowers’ history. Differentiating between borrowers applying to competitor banks and those reapplying to their current banks, as well as between borrowers with and without default history, we find an overall increase in credit access measured by both loan application acceptance and credit amount. While credit access increases, default rates decrease, generating an increase in aggregate welfare.