Interbank tiering and money center banks

Ben Craig and Goetz von Peter ()

No 912, Working Papers (Old Series) from Federal Reserve Bank of Cleveland

Abstract: Interbank markets are tiered rather than flat, in the sense that many banks do not lend to each other directly but through money center banks which act as intermediaries. This paper captures the notion of tiering by designing a core-periphery model and develops a procedure for fitting an empirical network to this model. We find strong evidence of tiering for the German banking system, using bilateral interbank exposures among 1,800 banks. Moreover, bank-specific features, such as bank size, help explain how banks position themselves in the interbank market, suggesting that models with heterogenous banks could help shed light on how financial networks are formed.

Keywords: Interbank; market (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (6)

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Related works:
Journal Article: Interbank tiering and money center banks (2014)
Working Paper: Interbank tiering and money center banks (2010)
Working Paper: Interbank tiering and money center banks (2010)
Working Paper: Interbank tiering and money center banks (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedcwp:0912

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