Financial Architecture and Financial Stability

Franklin Allen () and Ansgar Walther
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Franklin Allen: Finance Department, Business School, Imperial College London, London SW7 2AZ, United Kingdom
Ansgar Walther: Finance Department, Business School, Imperial College London, London SW7 2AZ, United Kingdom

Annual Review of Financial Economics, 2021, vol. 13, issue 1, 129-151

Abstract: This article studies the links between financial stability and the architecture of financial systems. We review the existing literature and provide organizing frameworks for analyzing three empirically important aspects of financial architecture: the rise of nonbank financial intermediaries, the regulatory response to these structural changes, and the emergence of complex interbank networks. One of our main new results is a necessary and sufficient condition for whether nonbank intermediaries are immune to runs in an extended version of the Diamond-Dybvig model.

Keywords: banks; non-bank intermediaries; financial crises; networks; contagion; regulation (search for similar items in EconPapers)
JEL-codes: G01 G21 G23 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (5)

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DOI: 10.1146/annurev-financial-110217-022851

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