avoided, and how those consequences could be mitigated. To that end, the article differentiates defaults caused by insolvency … from defaults caused by illiquidity. The latter, which are potentiated by rollover risk (the risk that the government will …

equity capital to the risk-free interest rate. When equity capital falls, bankruptcy risks rise. Firms become more vulnerable … long time. -- liquidity trap ; financial crisis ; rare disasters ; equity capital ; leverage ; bankruptcy risk …