Cipriani, Marco; McCabe, Patrick E.; Parigi, Bruno - Federal Reserve Bank of New York - 2014
intermediary to impose redemption fees or gates in a crisis—a form of suspension of convertibility—can lead to preemptive runs. In … uncertainty is resolved before redeeming if redemption fees or gates cannot be imposed, but those same investors would redeem … preemptively if fees or gates are possible. Second, we show that for the intermediary, which maximizes the expected utility only of …