collective bias in agents' expectations. Agents in the model make risk management decisions with incomplete knowledge. They … protective actions -- decreasing risk exposures, hoarding liquidity, locking-up capital -- that reflect a flight to quality …

collective bias in agents' expectations. Agents in the model make risk management decisions with incomplete knowledge. They … protective actions -- decreasing risk exposures, hoarding liquidity, locking-up capital -- that reflect a flight to quality …

explicitly absorb a larger share of the systemic risk. The options for doing this range from surplus countries rebalancing their … securitization industry while removing the systemic risk from the banks' balance sheets. Such public-private solutions could be …