This paper shows that individual beliefs on the effectiveness of formal and informal sources of risk sharing determine … access to private risk sharing networks. Moreover, we find that both types of trust associate positively with the probability … to take on financial risk for the purpose of becoming a homeowner and the related loan-to-value ratio. Our findings are …

Macroeconomists are increasingly using nonlinear models to account for the effects of risk in the analysis of business … cycles. In the monetary business cycle models widely used at central banks, an explicit recognition of risk generates a wedge … modification to the standard monetary policy rule to eliminate the wedge. In the proposed risk-adjusted policy rule, the intercept …

This paper addresses the trade-off between additional loss-absorbing capacity and potentially higher bank risk … increase their risk-taking. This increase in risk-taking however, should be more than outweighed by the benefits of higher …