We propose a tractable, model-based stress-testing framework where the solvency risks, funding liquidity risks and market risks of banks are intertwined. We highlight how coordination failure between a bank's creditors and adverse selection in the secondary market for the bank's assets interact,...

Economic downturns which have their roots in preceding credit excesses and debt overhang have tended historically to be long lasting, whether the financial sector remained healthy or not. There are no good reasons to believe the current global crisis will be any different. Moreover, it is argued...

While the Dodd-Frank Act (DFA) broadens the regulatory reach to reduce systemic risks to the U.S. financial system, it does not address some important risks that could migrate to or emanate from entities outside the federal safety net. At the same time, it limits the types of interventions by...

The collapse of Overend Gurney and the ensuing Crisis of 1866 was a turning point in British financial history. The achievement of relative stability was due to the Bank of Englandś willingness to offer generous assistance to the market in a crisis, combined with an elaborate system for...

When faced with a run on a "systemically important" but insolvent bank in 1889, the Banque de France pre-emptively organized a lifeboat to ensure that depositors were protected and an orderly liquidation could proceed. To protect the Banque from losses on its lifeboat loan, a guarantee syndicate...

Dieser Beitrag untersucht die Argumente für und gegen einen Ausstieg aus der expansiven Geldpolitik. Der Fokus liegt dabei auf der Betrachtung der Effekte eines Ausstiegs der amerikanischen Notenbank Fed auf die Eurozone. Dies erscheint sinnvoll, da die Fed als eine der ersten großen...

This paper studies the effects of ECB communications about unconventional monetary policy operations on the perceived sovereign risk of Italy over the last five years. More than fifty events concerning non-standard operations are identified and classified with respect to the specific ECB...

This paper offers an encompassing analysis of the ECB's collateral criteria between 2001 and 2013. A comprehensive database of changes to collateral criteria is compiled and structured by asset classes. The main findings can be summarized in three stylized facts: (1) Since the outbreak of the...