Fighting Crises
In fighting a financial crisis, opacity (keeping the names of banks borrowing at emergency lending facilities secret) and stigma (the cost of having a bank's name revealed) are desirable to restore confidence. Lending facilities raise the perceived average quality of all banks' assets. Opacity reduces the costs of these facilities, creating an information externality that prevents runs even on banks not participating in lending facilities. Stigma is costly but keeps banks from revealing their participation, making opacity sustainable. The key tool for implementing optimal opacity while fine tuning stigma is the haircut for bonds offered as collateral in lending facilities
Year of publication: |
2016
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Authors: | Gorton, Gary B. |
Other Persons: | Ordoñez, Guillermo (contributor) |
Publisher: |
[2016]: [S.l.] : SSRN |
Subject: | Wirtschaftskrise | Economic crisis | Finanzkrise | Financial crisis | Welt | World | Währungskrise | Currency crisis | Bankenkrise | Banking crisis | Krisenmanagement | Crisis management |
Saved in:
freely available
Extent: | 1 Online-Ressource (39 p) |
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Series: | NBER Working Paper ; No. w22787 |
Type of publication: | Book / Working Paper |
Language: | English |
Notes: | Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments October 2016 erstellt |
Source: | ECONIS - Online Catalogue of the ZBW |
Persistent link: https://www.econbiz.de/10012980183