How does the management and resolution of the current crisis compare with the response of the Nordic countries in the early 1990s, widely regarded as exemplary? We argue that, while intervention has been prompter, the measures taken so far remain less comprehensive and in-depth. In particular,...

How does the management and resolution of the current crisis compare with the response of the Nordic countries in the early 1990s, widely regarded as exemplary? We argue that, while intervention has been prompter, the measures taken so far remain less comprehensive and in-depth. In particular,...

What level of indebtedness jeopardizes economic stability? We show that the ratio of financial obligations (interest payments and amortizations) to income is crucial for capturing debt sustainability. Estimating a regime-switching model on aggregate US data, we find that credit losses become...

Banks individually optimize their liquidity risk management, often neglecting the externalities generated by their choices on the overall risk of the financial system. This is the main argument to support the regulation of liquidity risk. However, banks may have incentives to optimize their...