some savers have no risk-sharing motives, there exists a non-negligible set of economies (endowments) and equilibria at …

While the traditional view of financial innovation emphasizes the risk sharing role of new financial assets, belief …. This paper investigates the effect of financial innovation on portfolio risks in an economy when both the risk sharing and … the possibilities for risk sharing. My main result shows that financial innovation also always increases the speculative …

systemic risk. Equity capital acts as a buffer against losses, and reduces incentives for excessive risk taking. Basel capital … lower capital requirements resulting in excessive risk taking. Furthermore, the bank and the CDS seller (insurer) prefer … high correlation in their returns and jointly shift the risk to the regulator. CDS can be traded at a price higher than its …

associated with a greater degree of experimentation by investors. Investors respond to financing risk ― a forecast of limited … equilibrium, financing risk disproportionately impacts innovative ventures with the greatest real option value. We propose that …

products could be sold at reasonable prices. Early on, the goals of futures regulation centered one particular risk facing … argues, that is the problem. The many retail investors that now participate (indirectly) in the futures markets are at risk …

By exploiting basic common practice accounting and risk management rules, we propose a simple analytical dynamical … mark-to-market and risk management rules. We provide a full analytical quantification of the multivariate feedback effects … of financial institutions and, thereby, the availability of bank liquidity to the economic system and systemic risk. The …

conditions under which individual default is propagated endogenously into a collective risk of widespread default in general …

Cyber risk is an emerging source of systemic risk in the financial sector, and possibly a macro-critical risk too. It … approaches to assess and monitor cyber risk to the financial sector, including various approaches to stress testing. The paper …