Systemic Risk and the Optimal Seniority Structure of Banking Liabilities

Spiros Bougheas and Alan Kirman

No 2015/15, Discussion Papers from University of Nottingham, Centre for Finance, Credit and Macroeconomics (CFCM)

Abstract: The paper argues that systemic risk must be taken into account when designing optimal bankruptcy procedures in general, and priority rules in particular. Allowing for endogenous formation of links in the interbank market we show that the optimal policy depends on the distribution of shocks and the severity of fire sales

Keywords: Banks; Priority rules; Systemic Risk (search for similar items in EconPapers)
Date: 2015
New Economics Papers: this item is included in nep-ban and nep-rmg
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https://www.nottingham.ac.uk/cfcm/documents/papers/cfcm-2015-15.pdf (application/pdf)

Related works:
Journal Article: Systemic risk and the optimal seniority structure of banking liabilities (2018)
Working Paper: Systemic risk and the optimal seniority structure of banking liabilities (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:not:notcfc:15/15

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