Can consolidation policy be made consistent with macro-prudential supervision? In this study, we seek to provide new insights on this key-question using a network approach. We study how the resilience of a banking network evolves as we shock an initially homogenous competitive market with a...

The financial sector is a critical component of any economic system, as it delivers key qualitative asset transformation services in terms of liquidity, maturity and volume. Although these functions could in principle be carried out separately by specialized actors, in the end it is their...

The bilateral netting of mutual obligations is an institutional arrangement usually employed in payment systems to reduce settlement risks. In this paper we explore its advantages and pitfalls when applied to an inter-bank lending market, in which banks extend credit to - and borrow from - other...