The use of collateral has become one of the most widespread risk mitigation techniques. While it brings stabilizing effects to the individual lender we argue that it may exacerbate systemic risk through margin call activation. We show how a liquidity shock to the cash lender may propagate as a...

This essay focuses the factors that make ETFs and trading in them unique – at times uniquely risky. Following a deep dive into the microstructure of ETFs, I zoom in on the potential systemic risks associated with ETFs, with a focus on the legal structure and, in particular, the arbitrage...