Wharton finance professor Itamar Drechsler focuses his research on asset pricing, financial intermediation, macro finance and monetary policy. His latest studies, “ Banking on Deposits: Maturity Transformation without Interest Rate Risk” and “The Deposits Channel of Monetary Policy,” which were co-authored with Alexi Savov and Philipp Schnabl of NYU’s Stern School of Business, examine bank deposits as a channel of monetary policy. Drechsler spoke to Knowledge at Wharton about the novel approach taken in his work and why monetary policy continues to be such a challenging area for economists. An edited transcript of the conversation follows. Knowledge at Wharton: In one of your papers, you propose and test a new channel of monetary policy. Can you explain that? Itamar Drechsler: The question of how exactly monetary policy works is one of the central questions of macroeconomics.…