We model systemic risk in an interbank market. Banks face liquidity needs as consumers are uncertain about where they … need to consume. Interbank credit lines allow banks to cope with these liquidity shocks while reducing the cost of … all banks are solvent. When one bank is insolvent, the stability of the banking system is affected in various ways …

We model systemic risk in an interbank market. Banks face liquidity needs as consumers are uncertain about where they … need to consume. Interbank credit lines allow banks to cope with these liquidity shocks while reducing the cost of … all banks are solvent. When one bank is insolvent, the stability of the banking system is affected in various ways …

as the subsidy needed for private banks to internalize the cost of systemic risk. In either interpretation, the public … good factor is easy to measure: it corresponds to the subsidy needed for private banks to allocate their payments in the …

The classical Bagehot's conception of a Lender of Last Resort (LOLR) that lends to illiquid banks has been criticized … fully collateralized repo market allows Central Banks to provide the adequate aggregated amount of liquidity and leave the … responsibility of lending uncollateralized to the banks. The object of this paper is to analyze rigorously these issues by providing …

about banks' future payment volumes. It is shown that the optimal pricing scheme for a public monopoly systems involves … systems. The structure of the optimal tariff depends on the willingness of Central Banks to allow by-pass …

Central Bank should lend to ‘illiquid but solvent’ banks under certain conditions. Several authors have argued that this view … classical models of bank runs. We build a model of banks’ liquidity crises that possesses a unique Bayesian equilibrium. In this …

across banks. It is shown that the optimal pricing scheme for a public monopoly system involves quantity discounts in the … of the optimal tariff depends on the willingness of Central Banks to allow by-pass. …

We develop a simple integration of banks into the Solow model. The objective is to provide a tractable benchmark for … analyzing the long-term impact of crises on economic activities and growth. A fraction of firms have to rely on banks for … financing their investments, while banks themselves face an endogenous leverage constraint. Informed lending by banks and …

Since the financial crisis, governments and central banks have launched a consolidation of financial systems which …