A proposed research and policy agenda for systemic risk
The long-running Greek crisis and China’s recent stock market crash are the latest threats to the stability of the global financial system. But as...
Are asset managers systemically important?
Some financial authorities have proposed designating asset managers as systemically important financial institutions (SIFIs). This column argues that...
Failed Lehman Rescue efforts:Myths, Facts, and Lessons
Did Lehman really have to fail? This is one of the least-attended but most critical issues of the first decade and a half of this century. My view is...
A Kalecki Fable on Debt and the Monetary Transmission Mechanism
Kalecki explained debt resolution by means of a fable about monetary circulation between mutually indebted individuals. This Note explains the context...
Structural Banking Reforms: an illusionary solution
It is always dangerous to go against conventional thinking. But I must say that the focus on bank “structural reforms” puzzles me somewhat. So, I will...
Taming the Basel Leverage Cycle
Effective risk control must make a tradeoff between the microprudential risk of exogenous shocks to individual institutions and the macroprudential...
Insecure Debt
We analyse bank runs under fundamental and asset liquidity risk, adopting a realistic description of bank default. We obtain an unique run equilibrium...
Six structures in search of stability
This paper analyses the proposition that adjusting structure can strengthen safety and therefore promote stability. It examines six proposals...
Maturity Mismatch Stretching: Banking Has Taken a Wrong Turn
This note reviews the evolution of maturity transformation in banking and discuss- es the financial stability implications of its current level...
Activist Funds, Leverage, and Procyclicality
We develop a dual-layered agency model to study blockholder monitoring by activist funds that compete for investor flow. Competition for flow affects...
Endogenous Correlated Network Dynamics
We model the structure and strategy of social interactions prevailing at any point in time as a directed network and we address the following open...
If Greece defaults, dominoes will not fall
How would a unilateral Greek default affect politics and policy elsewhere in Europe? A Greek default is more likely to strengthen voter support across...
Why Iceland can now remove capital controls
Iceland has just announced it is getting rid of its capital controls. This column argues that the government’s plan is a credible, efficient and fair...
Default and political survival in networked democracies since 1870
Many fear that a Greek default would lead voters elsewhere in Europe to favour default over austerity. This column argues that it is more likely to...
Blended Automation: Integrating Algorithms on the Floor of the New York Stock Exchange
The recent automation of the American stock market has replaced floor intermediaries with trading algorithms, calling into question the sociological...
