Freixas, Xavier; Parigi, Bruno; Rochet, Jean-Charles - C.E.P.R. Discussion Papers - 1999
coordinating role of the Central Bank in preventing payments' systemic repercussions and we examine the justification of the 'too-big-to-fail-policy'. … all banks are solvent. When one bank is insolvent, the stability of the banking system is affected in various ways … depending on the patterns of payments across locations. We investigate the ability of the banking industry to withstand the …