About

Christine Parlour is the Sylvan C. Coleman Chair of Finance and Accounting at UC Berkeley Haas. Her work primarily focuses on institutionally complex areas such as market microstructure and banking, with current research emphasizing changes in the payments system and their effects on bank balance sheets. She has contributed to major finance and economics journals and has served on the Nasdaq Economic Advisory Board as well as on the steering committee for the New Special Study of Securities Markets. Her expertise includes fintech, digital payments, credit markets, finance, microstructure, and banking.

Research topics

• Computer Science
• Business
• Economics
• Finance
• Microeconomics
• Computer Security
• Monetary economics
• Financial system
• Medicine
• Marketing
• Commerce
• Internet privacy
• Industrial organization
• Econometrics

Selected publications

• New Payment Rails: Implications for Banking

  Annual Review of Financial Economics · 2025-11-06

  articleOpen access1st authorCorresponding

  Making payments in an efficient manner is critical to a well-functioning economic system. While the direct effect of reducing the cost of payments is an increase in user welfare, changes in the payment system can have broader economic effects. This is because payment systems are characterized by a multisided network externality, as the willingness of consumers to participate in a payment method depends on the number of merchants on the system and operators of a payment system can glean information from the payment flows. We highlight the role that banks have played in the payment system and show how payment innovation can lead to bank disintermediation both in payment services and in the credit market. We highlight some recent innovations in payments—some of these rely on the banking system and others try to bypass it. There are many interesting open questions for researchers to explore in this field.

  PublisherDOI

• An Introduction to Web3 with Implications for Financial Services

  SSRN Electronic Journal · 2025-01-01

  preprintOpen access1st authorCorresponding
  PublisherDOI

• Decentralized Exchange: The Uniswap Automated Market Maker

  The Journal of Finance · 2024-12-20 · 88 citations

  articleSenior author

  ABSTRACT Uniswap is a system of smart contracts on the Ethereum blockchain and is the largest decentralized exchange with a liquidity balance worth up to 4 billion USD and daily trading volume of up to 7 billion USD. It is a new model of liquidity provision, so‐called automated market making. For this new market form, we characterize equilibrium in the liquidity pools. We collect all 95.8 million Uniswap interactions and compare this automated market maker (AMM) to a centralized limit order book. We document absence of long‐lived arbitrage opportunities, and show conditions under which the AMM dominates a limit order market.

  PublisherDOI

• What Drives the (In)stability of a Stablecoin?

  2024-05-27 · 6 citations

  articleOpen access

  In May 2022, an apparent speculative attack, followed by market panic, led to the precipitous downfall of UST, one of the most popular stablecoins at that time. However, UST is not the only stablecoin to have been depegged in the past. Designing resilient and long-term stable coins, therefore, appears to present a hard challenge. To further scrutinize existing stablecoin designs and ultimately lead to more robust systems, we need to understand where volatility emerges. Our work provides a game-theoretical model aiming to help identify why stablecoins suffer from a depeg. This game-theoretical model reveals that stablecoins have different price equilibria depending on the coin’s architecture and mechanism to minimize volatility. Moreover, our theory is supported by extensive empirical data, spanning 1 year. To that end, we collect daily prices for 22 stablecoins and on-chain data from five blockchains including the Ethereum and the Terra blockchain.

  PublisherOA PDFDOI

• Battle of the Bots: Flash Loans, Miner Extractable Value and Efficient Settlement

  SSRN Electronic Journal · 2023-01-01 · 11 citations

  articleOpen accessSenior author
  PublisherDOI

• Fragmentation and optimal liquidity supply on decentralized exchanges

  arXiv (Cornell University) · 2023-07-25

  preprintOpen access

  We investigate how liquidity providers (LPs) choose between high- and low-fee trading venues, in the face of a fixed common gas cost. Analyzing Uniswap data, we find that high-fee pools attract 58% of liquidity supply yet execute only 21% of volume. Large LPs dominate low-fee pools, frequently adjusting out-of-range positions in response to informed order flow. In contrast, small LPs converge to high-fee pools, accepting lower execution probabilities to mitigate adverse selection and liquidity management costs. Fragmented liquidity dominates a single-fee market, as it encourages more liquidity providers to enter the market, while fostering LP competition on the low-fee pool.

  PublisherOA PDFDOI

• What Drives the (In)stability of a Stablecoin?

  arXiv (Cornell University) · 2023-06-15 · 2 citations

  preprintOpen access

  In May 2022, an apparent speculative attack, followed by market panic, led to the precipitous downfall of UST, one of the most popular stablecoins at that time. However, UST is not the only stablecoin to have been depegged in the past. Designing resilient and long-term stable coins, therefore, appears to present a hard challenge. To further scrutinize existing stablecoin designs and ultimately lead to more robust systems, we need to understand where volatility emerges. Our work provides a game-theoretical model aiming to help identify why stablecoins suffer from a depeg. This game-theoretical model reveals that stablecoins have different price equilibria depending on the coin's architecture and mechanism to minimize volatility. Moreover, our theory is supported by extensive empirical data, spanning $1$ year. To that end, we collect daily prices for 22 stablecoins and on-chain data from five blockchains including the Ethereum and the Terra blockchain.

  PublisherOA PDFDOI

• Raising Money

  SSRN Electronic Journal · 2023-01-01

  articleOpen accessSenior author
  PublisherDOI

• Payment System Externalities

  The Journal of Finance · 2022 · 27 citations

  1st authorCorresponding
  • Business
  • Monetary economics
  • Economics

  ABSTRACT We examine how the payment processing role of banks affects their lending activity. In our model, banks operate in separate zones, and issue claims to entrepreneurs who purchase some inputs outside their own zone. Settling bank claims across zones incurs a cost. In equilibrium, a liquidity externality arises when zones are sufficiently different in their outsourcing propensities—a bank may restrict its own lending because it needs to hold liquidity against claims issued by another bank. Our work highlights that the disparate motives for interbank borrowing (investing in productive projects and managing liquidity) can have different effects on efficiency.

  PublisherDOI

• Liquidity Fragmentation on Decentralized Exchanges

  SSRN Electronic Journal · 2022-01-01 · 26 citations

  articleOpen access
  PublisherDOI

Frequent coauthors

• Uday Rajan

  University of Michigan–Ann Arbor

  66 shared

• Johan Waldén

  University of California, Berkeley

  24 shared

• Thierry Foucault

  11 shared

• Richard Stanton

  University of California, Berkeley

  9 shared

• Ronald L. Goettler

  University of Rochester

  8 shared

• Alfred Lehar

  University of Calgary

  7 shared

• Marcus M. Opp

  6 shared

• Limor Golan

  6 shared

Labs

• Christine Parlour LabPI

Awards & honors

• Cheit Award for Excellence in Teaching
• Goldman Sachs Asset Management Quant Award for Best Paper in…
• WFA NYSE Best Equity Trading Paper