Cañón, Carlos; Margaretic, Paula - In: Journal of Banking & Finance 49 (2014) C, pp. 515-533
This article extends the application of global games of Goldstein and Pauzner (2005) in the banking model of Diamond and Dybvig (1983) to account for correlation in the quality of banks’ long term investment, when banks are linked through cross deposits and there is a central bank. The goal is...