Similar Search Results

Bank runs, portfolio choice, and liquidity provision

Ahnert, Toni; Elamin, Mahmoud - 2019

We examine the portfolio choice of banks in a micro-funded model of runs. To insure riskaverse investors against liquidity risk, competitive banks offer demand deposits. We use global games to link the probability of a bank run to the portfolio choice. Based upon interim information about risky...

Persistent link: https://www.econbiz.de/10012101651

Bank fragility and the incentives to manage risk

Ahnert, Toni; Bertsch, Christoph; Leonello, Agnese; … - 2024

Shocks to banks' ability to raise liquidity at short notice can lead to depositor panics, as evidenced by recent bank failures. Why don't banks take a more active role in managing these risks? In a standard bank-run model, we show that risk management failures are most prevalent when exposures...

Persistent link: https://www.econbiz.de/10015069721

Bank capital, liquid reserves, and insolvency risk

Hugonnier, Julien; Morellec, Erwan - 2015

We develop a dynamic model of banking to assess the effects of liquidity and leverage requirements on banks' insolvency risk. In this model, banks face taxation, flotation costs of securities, and default costs and maximize shareholder value by making their financing, liquid asset holdings, and...

Persistent link: https://www.econbiz.de/10011293576

Abolishing public guarantees in the absence of market discipline

Körner, Tobias; Schnabel, Isabel - 2012

This paper shows that the abolition of state guarantees to publicly owned banks in Germany resulted in an increase in refinancing costs at German savings banks. Rather than being the result of increased market discipline, the increase in refinancing costs is shown to be driven by spillover...

Persistent link: https://www.econbiz.de/10009664941

Banks without parachutes : competitive effects of government bail-out policies

Hakenes, Hendrik; Schnabel, Isabel - 2004 - First Version: November 12, 2003, This Version: June 16, 2004

The explicit or implicit protection of banks through government bail-out policies is a universal phenomenon. We analyze the competitive effects of such policies in two models with different degrees of transparency in the banking sector. Our main result is that the bail-out policy unambiguously...

Persistent link: https://www.econbiz.de/10010361991

When gambling for resurrection is too risky

Kirti, Divya - 2018

Rather than taking on more risk, US insurers hit hard by the crisis pulled back from risk taking, relative to insurers hit less hard by the crisis. Capital requirements alone do not explain this risk reduction: insurers hit hard reduced risk within assets with identical regulatory treatment....

Persistent link: https://www.econbiz.de/10011848370

Crisis management at cross-roads : challenges facing cross-border financial institutions at the EU level : a joint publication with the Centre for European Policy Studies (CEPS)

Ayadi, Rym (ed.); Lierman, Frank (ed.); Balling, Morten (ed.) - Conference "Crisis Management at Cross-Roads" <2009, …; … - 2010

On 16th November 2009, SUERF, CEPS and the Belgian Financial Forum coorganized a conference "Crisis management at cross-roads" in Brussels. All papers in the present volume are based on contributions at the conference and the SUERF Annual Lecture which followed the event.

Persistent link: https://www.econbiz.de/10011706117

Deposit withdrawals from distressed banks : client relationships matter

Brown, Martin; Guin, Benjamin; Morkoetter, Stefan - In: Journal of financial stability 46 (2020), pp. 1-19

Persistent link: https://www.econbiz.de/10012391420

Demand deposit contracts and bank runs with present biased preferences

Kang, Minwook - In: Journal of banking & finance 119 (2020), pp. 1-12

Persistent link: https://www.econbiz.de/10012521185

Preventing bank runs

Andolfatto, David; Nosal, Ed; Sultanum, Bruno - In: Theoretical Economics 12 (2017) 3, pp. 1003-1028

The work of Diamond and Dybvig, 1983 is commonly understood as a theory of bank runs driven by self …-fulfilling prophecies. Their contribution may alternatively be interpreted as a theory for preventing these bank runs. Absent aggregate risk …-run equilibrium, which suggests that Diamond and Dybvig, 1983 can be understood as a theory of bank runs. The use of direct mechanisms …

Persistent link: https://www.econbiz.de/10012010005