distorted the choices of financial intermediaries ex-ante (inducing them to rely too much and too quickly on liquidity for …

' borrowing costs during the crisis. Our results have important implications for the provision of liquidity by central banks …

The failure of Lehman Brothers highlighted the severe lapses in risk management and regulatory oversight that brought … on and intensified the global financial crisis. This paper presents a structural credit risk model that provides useful … insufficient collateral compounded the effects of dangerously high leverage and resulted in undercapitalization and excessive risk …

Investment banks are in the business of taking calculated risks. Risk management infrastructure facilitates the safe … pursuit of profits and the balancing of associated risks. By 2006, Lehman Brothers was thought to have a very respectable risk … management system, and even its regulator, the Securities and Exchange Commission, viewed its risk framework as being fully …

systemic risk in terms of coupled networks.Systemic risk to financial markets is often defined as the risk of a major and rapid … different class of risk agents in the market face, distinct from more conventional kinds of primary and secondary risks due to a …

We formalize the idea that the financial sector can be a source of non-fundamental risk. Households' desire to hedge … against price volatility can generate price volatility in equilibrium, even absent fundamental risk. Fearing that asset prices … may fall, risk-averse households demand safe assets from leveraged intermediaries, whose issuance of safe assets exposes …

collateral constraint helps maintain the stability at the cost of market liquidity supply …

Liquidity has its systemic aspect that is frequently neglected in research and risk management applications. We build a … model that focuses on systemic aspects of liquidity and its links with solvency conditions accounting for pertinent …