Nikos Paltalidis
Welcome to my webpage! I am Associate Professor of Finance at EMLV (Ecole de Management Léonard De Vinci, Paris Campus), Visiting Research Fellow at the University of Bath, and External Examiner at the Universities of Manchester, York and Nottingham Trent.
My research lies in the area of Banking, Monetary Policy, Corporate Finance, and Macro-Finance. Though my research is mainly empirical, I also strive to employ theoretical models to derive new insights.
contact: np2088 (at) bath.ac.uk or
nikos.paltalidis (at) devinci.fr
WORKING PAPERS:
Deposit Rates as Regional Economic Indicators
Abstract: This paper shows that local bank deposit rates are strong predictors of local economic downturns, outperforming deposit growth, credit growth, and standard leading indicators such as auto sales, unemployment claims, and job openings. A one standard deviation increase in county deposit rates predicts a 1.35 percentage point decline in GDP growth three years ahead and delivers an AUC of 0.73 in forecasting local recessions. We argue that deposit rates outperform quantity-based measures because, as equilibrium prices, they embed forward-looking information about the marginal cost of bank funding that quantities do not fully capture. Consistent with a funding-conditions channel, counties exposed to the 2018 Wells Fargo regulatory enforcement experienced deposit outflows, rising deposit rates, contractions in small-business lending, and slower GDP growth. Bank-level evidence further shows that the largest rate increases occur at banks with stretched credit-to-deposit ratios and low cash holdings, rather than at banks with weaker capital or higher non-performing loans. Together, these results establish deposit rates as a timely, granular, and publicly observable indicator of regional economic risk.
with D. Gounopoulos, D. Konstantios, V. Souitaris and G. Wood
Abstract: Why do firms so often fail to deliver on, or backslide from, their climate commitments? We argue that political lobbying buffers decoupling from external scrutiny, allowing firms to sustain a gap between their public commitments and their actual environmental performance. Firms invest in political influence to blunt the accountability and delay the policy and oversight pressure, preserving ambitious public commitments without fulfilling their climate targets. Using three measures of climate target attainment, including a novel text-based measure derived from earnings-call disclosures, we find that lobbying intensity predicts lower target achievement. Employing stacked difference-in-differences across seventeen exogenous state-level policy shocks, we find that the lobbying–decoupling relationship strengthens when firms face targeted new environmental policies that political influence can directly counter. By contrast, it weakens under Democratic administrations, when accountability pressure is more demanding, consistent with strategic rather than habitual political engagement. Institutional ownership works against this relationship, offsetting part of the decoupling that lobbying drives. These findings extend decoupling theory by identifying political lobbying as the mechanism through which firms convert institutional pressure into political protection, sustaining the gap between climate commitment and environmental performance.
Monetary Policy and The Green Paradox
with D. Gounopoulos, and D. Konstantios
Abstract: We exploit three distinctive monetary policy tools, monetary tightening shocks, central bank announcements and a machine-learning-based measure of climate-specific forward guidance from post-meeting minutes to assess how they shape corporate climate risk exposure. Monetary tightening shocks increase firms’ climate risk exposure, with the effect being more pronounced among high-emission firms. The effect is stronger in Europe than in the United States. Positive information shocks reduce exposure for European firms. Targeted ECB climate-related forward guidance causally increases brown firms’ climate risk exposure. These findings operate through a unified cost-of-capital channel where higher discount rates disproportionately penalize long-horizon decarbonization investments relative to short-duration carbon-intensive projects, inducing firms to tilt activity toward higher transition risk. Climate forward guidance triggers an additional regulatory-anticipation (“green paradox”) effect, prompting brown firms to front-load emissions-intensive production before anticipated policy tightening. Our work documents a novel and counterproductive role for both conventional monetary tools and central bank communication in the green transition.
The Safe Side of Shadow Banking
with K. Koufopoulos, P. Koutroumpis, A. Ladas, and L. Trigeorgis
Abstract: We construct a lender-specific geopolitical risk index that varies across commercial and shadow banks. Under geopolitical stress, shadow banks rebalance toward safer borrowers four times more aggressively than commercial banks. This involves larger volumes at compressed spreads and concentrating more capital in higher-quality deals. These safer deal-level choices aggregate into measurable portfolio-level improvement with lower risk dispersion. We find that commercial banks raise spreads while shadow banks hold them steady, opening a competitive wedge through which shadow banks attract the safe borrowers commercial banks have repriced away. Commercial banks tighten the supply of lending, displacing moderate-risk borrowers who represent quality upgrades for shadow banks. This qualifies the prediction that lending migration increases shadow bank risk by showing that during geopolitical stress the opposite holds. A stacked difference-in-differences around ten geopolitical events and Jordà local projections lead to the same persistence pattern.
with K. Koufopoulos, and G. Papadimitri
Abstract: We study whether firms shift income across domestic subsidiaries to obtain cheaper credit. We find that U.S. parent firms engage in income shifting motivated by banking market competition. We show that subsidiaries in states with more competitive banking markets report systematically higher profitability, consistent with parent firms reallocating income to entities where improved financials translate into cheaper credit. Standalone firms in the same banking markets show no comparable profitability gain, and the pattern does not appear in real operating metrics, indicating that the effect reflects income reallocation rather than genuine productivity differences. The combination of shifted income and competitive banking amplifies the loan spread benefit of banking competition for subsidiaries with higher reported profitability. Event-study evidence around bank merger shocks indicates that a reduction in local banking competition lowers subsidiary profitability and raises subsidiaries' loan spreads. The results reveal a previously undocumented non-tax motive for domestic income shifting and suggest that banking market structure shapes not only how firms borrow but also how they report income.
The Impact of Geopolitical Risk on Credit Risk
The 17th NARTI Annual Conference Excellence in Research Award
with C. Ioannidis, and B. Zhang
Abstract: This paper investigates the impact of geopolitical risk (GPR) on U.S. corporate credit risk. We find that elevated geopolitical risk and adverse geopolitical events significantly widen credit spreads, with realized actions (wars and terrorist attacks) exerting stronger influence than threats. Geopolitical risk proves idiosyncratic, producing heterogeneous effects on credit spreads across industries and firms. These divergent effects reflect agents’ different expectations, which are tied to declines in firm operating performance and amplified by firm’s reliance on external financing. Furthermore, different geopolitical events also generate distinct within-industry responses, underscoring the multifaceted nature of geopolitical risk.
Geopolitical Risk and Bank Lending
with B. Zhang
Working Paper
WORK IN PROGRESS:
The Price of Monitoring
with D. Gounopoulos, D. Konstantios, P. Michaelides, and S.Ongena
The Dark Side of Deposit-Lending Synergies
with S. Biswas, and K. Koufopoulos
PUBLICATIONS:
Forward Guidance and Corporate Lending
Review of Finance, Vol. 26 (4), July 2022, Pages 899-935
with M. Delis, S. Hong and D. Philip
[DOI] [Final Manuscript] [Slides]
Reaching for Yield and the Diabolic Loop in a Monetary Union
Journal of International Money and Finance, Vol. 108, November 2020, Pages 102-157
with S. Boubaker, D. Gounopoulos and D.K. Nguyen
[DOI] [Final Manuscript] [Replication material: Econometric Codes] [Covered by Columbia University, Columbia Law School Blog]
Asymmetric Dependence in International Currency Markets
The European Journal of Finance, Vol. 26 (10), April 2020, Pages 994-1017
with V. Patsika
Fiscal Policy Interventions at the Zero Lower Bound
Journal of Economic Dynamics and Control, Vol. 93, August 2018, Pages 297-314
with S. Boubaker and D.K. Nguyen
Reprint of: Assessing the Effects of Unconventional Monetary Policy and Low Interest Rates on Pension Fund Risk Incentives
Journal of Banking and Finance, Vol. 92, March 2018, Pages 340-357
with S. Boubaker, D. Gounopoulos and D.K. Nguyen
Assessing the Effects of Unconventional Monetary Policy and Low Interest Rates on Pension Fund Risk Incentives
Journal of Banking and Finance, Vol. 77, April 2017, Pages 35-52
with S. Boubaker, D. Gounopoulos and D.K. Nguyen
The Quest for Banking Stability in the Euro Area: The Role of Government Interventions
Journal of International Financial Markets, Institutions, and Money, Vol. 40, January 2016, Pages 111-133
with R. Kizys and K. Vergos
Transmission Channels of Systemic Risk and Contagion in the European Financial Network
Journal of Banking and Finance, Vol. 61 (1), December 2015, Pages 36-52
with D. Gounopoulos, R. Kizys and Y. Koutelidakis
[DOI] [Abstract] [Covered by The Guardian and The Irish Times]
Financial Crises and Stock Market Contagion in a Multivariate Time-Varying Asymmetric Framework
Journal of International Financial Markets, Institutions, and Money, Vol. 21 (1), February 2011, Pages 92-106
with D. Kenourgios and A. Samitas
Financial Market Dynamics in an Enlarged European Union
Journal of Economic Integration, Vol. 24, June 2009, Pages 197-221
with D. Kenourgios and A. Samitas
Book Chapter
Tail Risks in Credit, Commodity, and Shipping Markets
Finance and Risk Management for International Logistics and the Supply Chain,
S. Gong and K. Cullinane, Elsevier Academic Press: London, U.K., October 2018, Pages 129-166
with D. Gounopoulos