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The model presented in this paper juxtaposes two theories for why a firm might offer creditors a security interest to back up a loan. One theory holds that issuing secured debt allows the firm's owners to reduce expected payments in the event of bankruptcy to so-called "non-adjusting" creditors,...
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Systemic risk propagated through over-the-counter derivatives can best be managed by a public-private central … provide an effective policy instrument for controlling systemic risk. Moreover this structure, in contrast to current proposed …
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