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"
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)
New Economics Papers: this item is included in nep-ban, nep-cba, nep-cfn and nep-rmg
Date: 2016-01, Revised 2016-01
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http://www.gecomplexity-cost.eu/repec/cst/wpaper/geco_dp_2_16.pdf First version, 2016 (application/pdf)
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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