The CCFin blog

The 25th anniversary of the Cambridge Endowment for Research in Finance (CERF) was celebrated at a 2-day conference at Cambridge Judge Business School that highlighted the research and scholars that CERF has supported over the last quarter-century. Founding benefactors William and Weslie Janeway were among the distinguished guests, who also included Professor Deborah Prentice, Vice-Chancellor of the University of Cambridge, and Professor Gishan Dissanaike, Dean of Cambridge Judge.

Central bank decisions do more than change interest rates: they also shape how firms see the future. This article explains how this matters for the transmission of monetary policy to firm investment.

Edoardo Gallo and co-authors Maria Bigoni and Gabriele Camera investigate how co-operation can be sustained among strangers in networks of different sizes. Their laboratory experiment compares permanent ostracism, temporary ‘time-outs’, and intrinsically worthless tokens that participants can exchange for help. Temporary exclusion and monetary exchange work similarly well in small networks. In large networks, however, tokens are the only institution that produces near-full co-operation while keeping the network intact. The results show why money can be more than a means of payment: it can be a scalable institution for co-operation.

Even the top credit rating agencies systematically disagree on sovereign debt levels, which are reported based on widely differing data and standards. This has meaningful impact on financial markets and carries a real economic cost, and underlines the importance of accounting in shaping global capital markets and economic outcomes.

US companies operating in ecologically sensitive areas face hidden costs that investors consistently miss, generating a persistent return premium of up to 79 basis points a month for small-cap stocks. A new study from the Cambridge Centre for Finance (CCFin) at Cambridge Judge Business School shows that markets repeatedly mistake these stable environmental expenses for declining operational performance.

Pick up any careers guide and you will find the same reassuring arithmetic: stay in education longer, earn more money. It is a comforting equation, and for generations it has nudged millions of young people toward lecture halls and library desks. But what if that calculation is not just incomplete – what if it is asking entirely the wrong question?

Shareholder voting is meant to be the cornerstone of modern corporate governance. It is the mechanism through which investors approve directors, scrutinise pay, and respond to major strategic decisions. In principle, unless there is a dual-class structure, each share carries one vote, and control should reflect formal ownership. In practice, however, many shareholders do not vote.

Do institutional investors exchange information through their co-shareholding networks, and does this affect corporate decision-making? Drawing on NYC taxi data and M&A outcomes, we show that blockholder networks facilitate information flows that translate into superior acquisition performance.

In theory, a direct way through which monetary policy is able to affect demand is through consumer credit rates. When a rise in the policy rate is passed-through to consumer credit rates, taking out a loan becomes more expensive and aggregate demand is suppressed. In new research, we use Brazilian credit registry data to examine whether this pass-through of monetary policy to consumer interest rates happens equally across all borrowers. Preliminary results suggest that monetary policy disproportionately affects credit costs for lower-income borrowers such that it increases the interest rate spread across the income distribution.

We offer novel insights into borrowing, leveraged trading and price dynamics of real asset-backed tokens on the blockchain, resulting from the interaction between on-chain lending platforms and tokenized asset markets. We document the credit channel in Decentralised Finance (DeFi) as a potential source of short-term price fluctuations in tokenized real asset markets.

Strategic voting by informed shareholders can undermine shareholder democracy, impacting corporate governance and market efficiency.

In this article, Naoki Yago discusses how central banks should optimally combine monetary and exchange rate stabilisation policies. Naoki completed his PhD in Economics at the University of Cambridge in 2025. He was a former PhD scholar at the Cambridge Endowment for Research in Finance. He will join the Henley Business School, University of Reading, as a Lecturer in Finance this September.