Liquidity Coinsurance, Moral Hazard, and Financial Contagion  

Oleh:

Brusco, Sandro ; Castiglionesi, Fabio

Jenis: Article from Journal - ilmiah internasional
Dalam koleksi: The Journal of Finance (EBSCO) vol. 62 no. 5 (Oct. 2007), page 2275-2302.
Topik: MORAL HAZARD; liquidity; coinsurance; moral hazard; financial contagion
Fulltext: p 2275.pdf (157.46KB)

Ketersediaan

Perpustakaan Pusat (Semanggi) Nomor Panggil: JJ88 Non-tandon: 1 (dapat dipinjam: 0) Tandon: tidak ada

Lihat Detail Induk

Isi artikel

We study the propagation of financial crises among regions in which banks are protected by limited liability and may take excessive risk. The regions are affected by negatively correlated liquidity shocks, so liquidity coinsurance is pareto improving. The moral hazard problem canbe solved if banks are sufficiently capitalized. Under autraky a limited amount of capital is sufficient to prevent risk - taking, but when financial markets are open capital becomes insufficient. Thus bankruptcy occurs with positive probability and the crisis spreads to other regions via financial linkages. Opening financial markets is nevertheless. Pareto improving : consumers benefit from liquidity coninsurance, although they pay the cost of excessive risk - taking.

Opini Anda

Klik untuk menuliskan opini Anda tentang koleksi ini!

Kembali