Do cognitive biases call for regulation to limit the use of credit? We incorporate over-optimistic and rational borrowers into an incomplete markets model with consumer b[...]

How did funding structures—the source, instrument, currency, and counterparty location of financing—relate to the financial stress experienced in different countries and [...]

Financial systemic risk is often assessed by the interconnectedness of financial institutes (FI) in terms of cross-ownership, overlapping investment portfolios, interbank[...]

Interconnectedness among insurers and reinsurers at a global level is not well understood and may pose a significant risk to the sector, with implications for the macroec[...]

We develop a model in which a financial intermediary's investment in risky assets—risk taking—is excessive due to limited liability and deposit insurance, and characteriz[...]

I use a unique institutional feature of money market funds to identify whether funds hold additional liquidity to guard against and prevent potential investor runs. Speci[...]

Empirical evidence suggests financial intermediaries increase risky investments when interest rates are low. We develop a model consistent with this observation and ask w[...]

Recent reform proposals call for an elimination of the constant net asset value (NAV) or "buck" in money market mutual funds to reduce the occurrence of runs. Outside the[...]

This paper provides a framework to compare linked and unlinked CCP configurations in terms of total netting achieved by market participants and the total system default e[...]

Recent reform proposals call for an elimination of the constant net asset value (NAV) or “buck” in money market mutual funds to reduce the occurrence of runs. Outside the[...]