detail, Darrell Duffie walks readers step-by-step through the mechanics of large-bank failures. He identifies where the … cracks first appear when a dealer bank is weakened by severe trading losses, and demonstrates how the bank's relationships … exposure to the dealer bank, the bank is forced to signal its strength by using up its slim stock of remaining liquid capital …

a bailout either if the bank is small in the economy or if the bank is large and the ex ante stability level of the bank …In a global game, I show that creditor bailins, when well-designed, can attain the exact same level of bank stability …