Bucher, Monika; Dietrich, Diemo; Tvede, Mich - 2018
secondary asset markets. While all banks are subject to extrinsic risk, a bank's portfolio choice determines whether it is prone … to a bank run in one of the extrinsic states. Asset prices determine the value of bank assets and thus how to structure … prices are state-dependent, bank runs do not occur and the efficient allocation obtains. Interbank asset markets are also a …