Interbank tiering and money center banks

Ben Craig and Goetz von Peter ()

No 1014, Working Papers (Old Series) from Federal Reserve Bank of Cleveland

Abstract: This paper provides evidence that interbank markets are tiered rather than flat, in the sense that most banks do not lend to each other directly but through money center banks acting as intermediaries. We capture the concept of tiering by developing a core-periphery model, and devise a procedure for tting the model to real-world networks. Using Bundesbank data on bilateral interbank exposures among 1800 banks, we find strong evidence of tiering in the German banking system. Econometrically, bank-specific features, such as balance sheet size, predict how banks position themselves in the interbank market. This link provides a promising avenue for understanding the formation of financial networks.

Keywords: Interbank market; Banks and banking, Central - Germany (search for similar items in EconPapers)
Date: 2010
New Economics Papers: this item is included in nep-cba and nep-mon
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Citations: View citations in EconPapers (48)

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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 (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedcwp:1014

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DOI: 10.26509/frbc-wp-201014

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