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In moral hazard models, bank shareholders have incentives to transfer wealth from the deposit insurer - that is, maximize put option value - by pursuing riskier strategies. For safe banks with large charter value, however, the risk-taking incentive is outweighed by the possibility of losing...
Persistent link: https://www.econbiz.de/10001630859
We provide a framework for monitoring the shadow banking system. The shadow banking system consists of a web of specialized financial institutions that conduct credit, maturity, and liquidity transformation without direct, explicit access to public backstops. The lack of such access to sources...
Persistent link: https://www.econbiz.de/10010699375
in which one tries to exit the market before the others to avoid spillovers. Although financial contagion originates in … weaker institutions, systemic risk depends critically on the financial health of stronger institutions in the contagion chain … promotes systemic stability and 2) bolstering the strong institutions in the contagion chain, rather than the weak, more …
Persistent link: https://www.econbiz.de/10010699383
Remarks at the New York Bankers Association Financial Services Forum, New York City.
Persistent link: https://www.econbiz.de/10010724934
Joint written testimony before the Congressional Oversight Panel, Washington, D.C.
Persistent link: https://www.econbiz.de/10010724976
Testimony before the U.S. Senate Committee on Banking, Housing and Urban Affairs, Washington, D.C.
Persistent link: https://www.econbiz.de/10010725003
Remarks at the Global Economic Policy Forum, New York City.
Persistent link: https://www.econbiz.de/10010725026
While the Dodd-Frank Act (DFA) broadens the regulatory reach to reduce systemic risks to the U.S. financial system, it does not address some important risks that could migrate to or emanate from entities outside the federal safety net. At the same time, it limits the types of interventions by...
Persistent link: https://www.econbiz.de/10010628480