Contagion and Bailouts in Financial Networks
Contagion and Bailouts in Financial Networks - HEC Paris
As widespread default involves substantial deadweight costs, to counter them, a regulator can inject capital into failing firms. These injections have positive ...
Financial Networks and Contagion
In fact, financial networks can create moral hazard and favor the opposite outcome. We show that counterparties have incentives to bail out a failing ...
Financial networks: contagion, commitment, and private sector bailouts
Financial networks: contagion, commitment, and private sector bailouts ... banks bail out illiquid banks because of the threat of contagion. Introducing ...
Financial networks: contagion, commitment, and private sector bailouts
The author develops a model of financial networks where linkages not only spread contagion, but also induce private-sector bailouts in which liquid banks ...
Contagion in Financial Networks - American Economic Association
Network connections diversify firms' risk exposures, but they also create channels through which shocks can spread by contagion.
Although such bailouts circumvent the widespread failures that were more prevalent in the nine- teenth and early twentieth centuries, they emphasize the need to ...
The optimal bailout policy in an interbank network - ScienceDirect.com
The model in this paper aims to highlight two motivations behind the bailouts of banks: prevention of costly bankruptcies and prevention of financial contagion.
Contagion in financial networks | Proceedings of the Royal Society A
The complex network structure and interactions between financial intermediaries make for non-linear system dynamics, whereby contagion risk can ...
Contagion in Financial Networks*
The Financial Crisis Inquiry Report concludes (p.352), “Without the bailout, AIG's default and collapse could have brought down its ...
Financial Networks: Contagion, Commitment - jstor
but also induce private sector bailouts, where liquid banks bail out illiquid ban because of the threat of contagion. Introducing this bailout possibility ...
Interbank Debt Contagion and Financial Network Solvency - OCC.gov
Interbank lending or borrowing, or debt or equity financing, may result in the contagion effect if one or a few banks fail in the financial network system.
Financial Networks: Contagion, Commitment, and Private Sector ...
I develop a model of financial networks in which linkages not only spread contagion, but also induce private sector bailouts, where liquid banks bail out ...
Contagion in financial networks - LSE Research Online
The Financial. Crisis Inquiry Report concludes, “Without the bailout, AIG's default and collapse could have brought down its counterparties, caus- ing ...
Financial Networks and Contagion - American Economic Association
counterparties have incentives to bail out a failing organization22 to avoid (indi- rectly) incurring failure costs. To improve its bargaining position in ...
Financial Networks: Contagion, Commitment, and Private Sector ...
I develop a model of financial networks in which linkages not only spread contagion, but also induce private sector bailouts.
Bank bailouts and bank-sovereign risk contagion channels
In contrast to Europe, a bailout shock generates a persistent decrease in the default risk of the US banking sector. The bank-sovereign risk contagion is ...
Contagion, Commitment, and Private Sector Bailouts by Yaron Leitner
I develop a model of financial networks in which linkages not only spread contagion, but also induce private sector bailouts.
Solvent or liquid organizations may have incentives to bail out insolvent or illiquid ones in order to avert a contagion (as pointed out, for example, by ...
Working Paper No. 383 Contagion in financial networks - CiteSeerX
Key words: Contagion, network models, systemic risk, liquidity risk, financial crises. JEL classification: D85, G01, G21. (1) Australian National University and ...
Contagion, Commitment, and Private Sector Bailouts - Ex Libris
ABSTRACTI develop a model of financial networks in which linkages not only spread contagion, but also induce private sector bailouts, where liquid banks bail ...