Systemic risk and the optimal seniority structure of banking liabilities

Spiros Bougheas and Alan Kirman

No 201602, Gecomplexity Discussion Paper Series from Action IS1104 "The EU in the new complex geography of economic systems: models, tools and policy evaluation"

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)
JEL-codes: G21 G28 (search for similar items in EconPapers)
Pages: 28 pages
Date: 2016-01, Revised 2016-01
New Economics Papers: this item is included in nep-ban, nep-cba, nep-cfn and nep-rmg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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http://www.gecomplexity-cost.eu/repec/cst/wpaper/geco_dp_2_16.pdf First version, 2016 (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 (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:cst:wpaper:201602

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