The goal of this essay is to show an insurance market equilibrium defined by an insurance product price and a …

In the present paper, I analyze how unobservable savings affect risk sharing and bankruptcy decisions in the financial … insurance and incentive motivations. Second, unobservable markets do induce default, but only as long as insurance markets are … incomplete. Therefore, their presence is not a rationale for government intervention on bankruptcy via "resolution regimes …

shocks either in the interbank market or by using a costly bankruptcy procedure, and depositors trade in the asset market …