In this paper we re-examine the risk sharing potential of inter- generational financial intermediaries taking into account their governance structure. We argue that asset buffers of perpetual institutions are limited by the temptation of the living stakeholders to renegotiate contributions and...

In this paper we investigate the risk sharing potential of financial intermediaries in an overlapping generations economy. We find that the intermediaries' allocations are constrained by the temptation of the living to liquidate their intermediary's assets and share the proceeds amongst...

We analyze an overlapping generations economy where agents interact to share liquidity risk. We show that a pure exchange economy has excessive trade in equilibrium because agents interact to rebalance their portfolios. Intergenerational financial intermediaries reduce the number of interactions...