This relatively simple model attempts to capture and integrate four widely held views about financial crises. [1] Interconnectedness among financial institutions (banks) can play a major role in precipitating systemic financial crises. [2] Lack of information about the quality of bank portfolios...

In this paper, we construct a simple model designed to capture four widely held views about financial crises: [1] Interconnectedness among financial institutions (banks) can play a major role in precipitating systemic financial crises. [2] It does so by introducing loan-portfolio opacity,...

Periods of economic turmoil distort the ability of stock prices to reflect the available information. In the last three decades, emerging markets experienced numerous crises. The major three of them are the Asian Financial Crisis (1997-1998), Global Financial Crisis (2007-2009) and Global...