Climate-related financial risks might have the potential to trigger the next systemic financial crisis, as recently stated by the Bank for International Settlements. In consequence, understanding these so-called Green Swan risks should be a key priority in financial decision-making and...

Understanding climate-related risks has become a key priority in financial decision-making and for regulatory supervision in the financial sector since the Task-force on Climate-related Financial Disclosures (TCFD) launched its recommendations on climate risk disclosures in 2017. However, a...

A healthy financial system encourages the efficient allocation of capital and risk. The collapse of the house price bubble led to the financial crisis that started in 2007. There is a large empirical literature concerning the relation between asset price bubbles and financial crises. I evaluate...

A healthy financial system encourages the efficient allocation of capital and risk. The collapse of the house price bubble led to the financial crisis that started in 2007. There is a large empirical literature concerning the relation between asset price bubbles and financial crises. I evaluate...

This interdisciplinary paper explains how mathematical techniques of stochastic optimal control can be applied to the recent subprime mortgage crisis. Why did the financial markets fail to anticipate the recent debt crisis, despite the large literature in mathematical finance concerning optimal...

A healthy financial system encourages the efficient allocation of capital and risk. The collapse of the house price bubble led to the financial crisis that started in 2007. There is a large empirical literature concerning the relation between asset price bubbles and financial crises. I evaluate...

This interdisciplinary paper explains how mathematical techniques of stochastic optimal control can be applied to the recent subprime mortgage crisis. Why did the financial markets fail to anticipate the recent debt crisis, despite the large literature in mathematical finance concerning optimal...

This paper builds a model that links collateral reuse, collateral allocation, and aggregate output. The model shows that collateral reuse affects aggregate output through two channels. First, collateral reuse allows multiple investment projects to be financed by economizing on scarce collateral,...

This Policy Analysis explains the antecedents of the current global financial crisis and critically examines the reasoning behind the U.S. Treasury and Federal Reserve's actions to prop up the financial sector. It argues that recovery from the financial crisis is likely to be slow with or...