New Findings Reported from University of New Mexico Describe Advances in Investment (Too Big To Fail? Asymmetric Effects of Quantitative Easing): Investment

Economics Daily Report

2025 MAR 19 (NewsRx) -- By a News Reporter-Staff News Editor at Economics Daily Report -- Investigators publish new report on Investment. According to news originating from Albuquerque, New Mexico, by NewsRx correspondents, research stated, “In this study, we examine the impact of liquidity support from the Federal Reserve on the capital structures of firms of varying sizes. Our findings suggest that large firms tend to increase their debt financing and leverage ratios in response to significant shocks triggered by the large-scale asset purchases (LSAPs) of the US Federal Reserve.”

Our news journalists obtained a quote from the research from the University of New Mexico, “By contrast, small firms with preexisting banking relationships are more likely to receive liquidity support. Notably, small firms associated with smaller banks exhibit increased default risks. Furthermore, large firms exhibited weaker operating performance but received greater managerial compensation following the LSAP.”

According to the news editors, the research concluded: “This trend indicates potential inefficiencies in the distribution of funding facilitated by unconventional monetary policies.”

This research has been peer-reviewed.

For more information on this research see: Too Big To Fail? Asymmetric Effects of Quantitative Easing. Journal of Financial Stability, 2025;77. Journal of Financial Stability can be contacted at: Elsevier Science Inc, Ste 800, 230 Park Ave, New York, NY 10169, USA. (Elsevier - www.elsevier.com; Journal of Financial Stability - http://www.journals.elsevier.com/journal-of-financial-stability/)

The news correspondents report that additional information may be obtained from Hsuan-Chi Chen, University of New Mexico, Anderson School of Management, Albuquerque, NM 87131, United States. Additional authors for this research include Robin K. Chou, Chih-Yung Lin and Chien-Lin Lu.

The direct object identifier (DOI) for that additional information is: https://doi.org/10.1016/j.jfs.2025.101385. This DOI is a link to an online electronic document that is either free or for purchase, and can be your direct source for a journal article and its citation.