idiosyncratic income risk. Self-enforcing contracts for both the original coalition and any deviating coalition rely on a belief in …We analyze efficient risk-sharing arrangements when coalitions may deviate. Coalitions form to insure against … original as well as a deviating coalition. As a consequence, although social capital facilitates the initial formation of …

We analyze the emergence of systemic risk in a network model of interconnected bank balance sheets. The model … incorporates multiple sources of systemic risk, including size of financial institutions, direct exposure from interbank lendings …, and asset fire sales. We suggest a new macroprudential risk management approach building on a system wide value at risk …