We present a simple model of systemic risk and show how each financial institution’s contribution to systemic risk can … empirically the ability of components of SES to predict emerging systemic risk during the nancial crisis of 2007-2009. …

capitalized. We employ a set of headline facts about the build-up of such risk exposures to explain how and why LCFIs adopted this … in decades preceding the current one, allowing LCFIs to take on excessive systemic risk. We also examine alternative … banking, excess liquidity due to global imbalances and mispricing of risk due to behavioral biases have some merit as …

against the benefit of equity in attenuating risk-shifting. However, faced with socially-costly correlated bank failures …, regulators bail out creditors. Anticipation of this generates multiple equilibria, including one with systemic risk in which …

against the benefit of equity in attenuating risk-shifting. However, faced with socially-costly correlated bank failures …, regulators bail out creditors. Anticipation of this generates multiple equilibria, including one with systemic risk in which …

turn, banks hoard liquidity and decrease term lending as their rollover risk increases over the term of the loan. High …