Don’t Stop Me Now: The Impact of Credit Market Fragmentation on Firms’ Financing Constraints
This paper investigates how the withdrawal of banks from their cross-border business impacted the borrowing costs of European firms since the crisis...
Econometric Modeling of Systemic Risk: Going Beyond Pairwise Comparison and Allowing for Nonlinearity
Financial instability and its destructive effects on the economy can lead to financial crises due to its contagion or spillover effects to other parts...
External Financial Dependence and Firms’ Crisis Performance across Europe
Economic research has often relied on a measure of external financial dependence that is constructed using U.S. data and applied to other countries...
Does it Pay to Buy the Pot in the Canadian 6/49 Lotto: Implications for Lottery Design
The Canadian 6/49 Lotto©, despite its unusual payout structure, is one of the few government sponsored lotteries that has the potential for a...
Monetary Easing and Financial Instability
We study optimal monetary policy in the presence of financial stability concerns. We build a model in which monetary easing can lower the cost of...
Why macropru can end up being procyclical
Discretionary macroprudential policies aim to be countercyclical by adjusting risk-taking across the financial cycle. This column argues that the...
The fatal flaw in macropru: It ignores political risk
Political risk is a major cause of systemic financial risk. This column argues that both the integrity and the legitimacy of macroprudential policy...
The Anatomy of the CDS Market
Using novel position and trading data for single-name corporate credit default swaps (CDSs), we provide evidence that CDS markets emerge as...
Systemic Risk and the Dynamics of Temporary Financial Networks
This paper has two main objectives: first, to provide a formal definition of endogenous systemic risk that is firmly grounded in equilibrium dynamics...
On K-Class Discounted Stochastic Games
For a discounted stochastic game with an uncountable state space and compact metric action spaces, we show that if the measurable-selection-valued...
Stationary Markov Equilibria for Approximable Discounted Stochastic Games
We identify a new class of uncountable-compact discounted stochastic games for which existence of stationary Markov equilibria can be established and...
The Anatomy of the CDS Market
Using novel position and trading data for single-name corporate credit default swaps (CDSs), we provide evidence that CDS markets emerge as...
Why it doesn't make sense to hold bonds
Investor demand for bonds is very high. This column argues that this is surprising because under almost any likely inflation scenario, including...
On the financial market consequences of Brexit
Brexit creates new opportunities and new risks for the British and EU financial markets. Both could benefit, but a more likely outcome is a fall in...
Cyber risk as systemic risk
The threat to the financial system posed by cyber risk is often claimed to be systemic. This column argues against this, pointing out that almost all...
