Systemic risk and the optimal seniority structure of banking liabilities

Spiros Bougheas and Alan Kirman

International Journal of Finance & Economics, 2018, vol. 23, issue 1, 47-54

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.

Date: 2018
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Citations: View citations in EconPapers (5)

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https://doi.org/10.1002/ijfe.1602

Related works:
Working Paper: Systemic risk and the optimal seniority structure of banking liabilities (2016)
Working Paper: Systemic Risk and the Optimal Seniority Structure of Banking Liabilities (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:wly:ijfiec:v:23:y:2018:i:1:p:47-54

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