We use a spatial Probit model to study the effect of contagion between banking systems of different countries on the probability of a systemic crisis in one county. Applied to the late 90’s banking crisis in Asia we show that the phenomena of contagion is better seized using a spatial than a...

Structured retail products (SRP) are one of the most visible faces of financial innovation and are becoming increasingly popular amongst retail investors. However, there is strong consensus that retail investors’ preference for structured products is difficult to explain using the standard...