Perfect consumption risk sharing requires both, frictionless goods as well as frictionless financial market integration. This project aims at analyzing the consequences of both type of frictions for the allocation of risk across countries in a unified framework. To this end, the theoretical...

Perfect risk sharing requires both, frictionless goods as well as frictionless asset markets. To analyze the consequences of both type of frictions for consumption risk sharing across countries, the model by Ghironi and Melitz (2005) is extended to allow for international trade in equities. The...

This model analyzes the impact of monetary policy on international consumption risk sharing. To this end, the setup by Ghironi and Stebunovs (2008) is extended in two dimensions. First, to allow for international portfolio choices, cross-border trade of home and foreign equity is brought in....

Over the past decades, banks have significantly increased their cross-border asset positions. The ongoing crisis on international financial markets has raised the question whether this increase in cross-border activities has allowed banks to diversify risks and to what extent it has increased...

Government interventions into the financial system in the form of bail out operations or liquidity assistance are often justified with the systemic importance of large banks for the real economy. In this paper, we test whether idiosyncratic shocks to loan growth at large banks have effects on...