Das Geschehen auf den Finanzmärkten hängt vom individuellen Verhalten ab, wird aber auch wesentlich bestimmt durch die Ausgestaltung des Finanzsystems, das heisst durch die Rollen, die den einzelnen Akteure zugewiesen werden, und durch die Regeln für die Interaktion der verschiedenen Rollen....

This paper proposes a new measure of tail risk spillover, namely the conditional coexceedance which is the number of joint occurrences of extreme negative returns in an industry conditional on an extreme negative return in the financial sector. The empirical application provides evidence of...

There is a growing consensus that the U.S. government programs of bailing out the large financial institutions is deeply flawed, and that there are much better ones available. The programs of the U.S. for the purchase of toxic assets potentially transfer trillions of dollars from the US taxpayer...

This paper presents a possible solution to financial crises by addressing the core of the problem of systemic risk. To get there, it first illustrates a number of crises related situations before the definition of systemic risk is detailed. It then explains challenges of systemic risk and...

This paper examines whether monetary policy reaction function matters for financial stability. We measure how responsive the Federal Reserve's policy appears to be to imbalances in the equity, housing and credit markets. We find that changes in these policy sensitivities predict the later...

Standard or traditional finance research is based on the rational choice model that assumes market participants are fully rational, unbiased, emotionless, self-interested maximizers of expected utility. Recent research in behavioral finance recognizes that real-world investors and managers are...

This paper explores financial stability policies for the shadow banking system. I tie policy options to economic mechanisms for shadow banking that have been documented in the literature. I then illustrate the role of shadow bank policies using three examples: agency mortgage real estate...

I develop a dynamic equilibrium model that incorporates incorrect beliefs about crash risk and use it to explain the available empirical evidence on financial booms and busts. In the model, if a long period of time goes by without a crash, some investors' perceived crash risk falls below the...