We conduct a laboratory experiment to examine under which circumstances a depositor-run at one bank may lead to a … depositor-run at another bank. We implement two-person coordination games which capture the essence of the Diamond-Dybvig (1983 …) bank-run model. Subjects in the roles of followers observe the deposit withdrawal decisions of leaders before they make …

need to consume. Interbank credit lines allow to cope with these liquidity shocks while reducing the cost of maintaining … are solvent. When one bank is insolvent, the stability of the banking system is affected in various ways depending on the … patterns of payments across locations. We investigate the ability of the banking system to withstand the insolvency of one bank …

attacks. In a final section we show that the recent sub prime' turmoil in credit markets has not materially affected the …

pre-crisis bank behavior, and suggest implications for the optimal design of capital regulation. …

This paper discusses liquidity regulation when short-term funding enables credit growth but generates negative systemic … incentives for risk creation. When banks differ in credit opportunities, a Pigovian tax on short-term funding is efficient in … containing risk and preserving credit quality, while quantity-based funding ratios are distorsionary. Liquidity buffers are …