Lirimont, Sebastien Vivier - In: Revue d'économie politique 116 (2006) 4, pp. 487-500
In a Diamond and Dybvig [1983] frame where liquidity shocks are unknown, banks embbed into a network of partners in … welfare. The resulting network structure tackles the issue of the unknown liquidity shock distribution and drives to rate of … not maximizes available liquidity. Because of the network of interbank relations, a small isolated liquidity shock may …