William Diamond

Assistant Professor of Finance

Contact Information

Primary Email:
diamondw@wharton.upenn.edu
Office Phone:
215-898-3609

office Address:
2320 Steinberg-Dietrich Hall
3620 Locust Walk
Philadelphia, PA 19104

Links: CV

Research

William Diamond (2020), Safety Transformation and the Structure of the Financial System, Journal of Finance.
William Diamond, Yiming Ma, Zhengyang Jiang, Monetary Transmission through Bank Balance Sheet Synergies.
William Diamond and Tim Landvoigt, Credit Cycles with Market Based Household Leverage (Revise and Resubmit, Journal of Financial Economics).
Abstract: We develop a model in which mortgage leverage available to households depends on the risk bearing capacity of financial intermediaries. Our model features a novel transmission mechanism from Wall Street to Main Street, as borrower households choose lower leverage and consumption when intermediaries are distressed. The model has financially constrained young and unconstrained middle-aged households in overlapping generations. Young households choose higher leverage and riskier mortgages than the middle-aged, and their consumption is particularly sensitive to credit supply. Relative to a standard model with exogenous credit constraints, the macroeconomic importance of intermediary net worth is magnified through its effects on household leverage, house prices, and consumption demand. The model quantitatively demonstrates how recessions with housing crises differ from those driven only by productivity, and how a growing demand for safe assets replicates many features of the 2000s credit boom and increases the severity of future financial crises.
Jules van Binsbergen, William Diamond, Marco Grotteria (Forthcoming), Risk Free Interest Rates (Accepted, Journal of Financial Economics).
William Diamond and Nikhil Agarwal (2017), Latent Indices in Assortative Matching Models, Quantitative Economics (best paper award in QE for 2017).

Teaching

Past Courses

FNCE100 - CORPORATE FINANCE
This course provides an introduction to the theory, the methods, and the concerns of corporate finance. The concepts developed in FNCE 100 form the foundation for all elective finance courses. The main topics include: 1) the time value of money and capital budgeting techniques; 2) uncertainty and the trade-off between risk and return; 3) security market efficiency; 4) optimal capital structure, and 5) dividend policy decisions. ACCT 101 + STAT 101 may be taken concurrently.
FNCE611 - CORPORATE FINANCE
This course serves as an introduction to business finance (corporate financial management and investments) for both non-majors and majors preparing for upper-level course work. The primary objective is to provide the framework, concepts, and tools for analyzing financial decisions based on fundamental principles of modern financial theory. The approach is rigorous and analytical. Topics covered include discounted cash flow techniques; corporate capital budgeting and valuation; investment decisions under uncertainty; capital asset pricing; options; and market efficiency. The course will also analyze corporate financial policy, including capital structure, cost of capital, dividend policy, and related issues. Additional topics will differ according to individual instructors.