This paper provides evidence that interbank markets are tiered rather than flat, in the sense that most banks do not lend to each other directly but through money center banks acting as intermediaries. We capture the concept of tiering by developing a core-periphery model, and devise a procedure...

Interbank markets are tiered rather than flat, in the sense that many banks do not lend to each other directly but through money center banks which act as intermediaries. This paper captures the notion of tiering by designing a core-periphery model and develops a procedure for fitting an...