Calendrier du 06 mars 2017
Roy Seminar (ADRES)
Du 06/03/2017 de 17:00 à 18:30
Salle E001, RDC Bâtiment E, Campus Jourdan, 48 boulevard Jourdan, 75014 Paris
ELLIOTT Robert (Burmingham)
Endogenous Financial Networks: Efficient Modularity and Why Shareholders Prevent It
We consider systemic risk in financial networks, by examining the conflict of interest between debt- and equity-holders. Through trading, banks can diversify their idiosyncratic risks and avoid failures following small shocks. However, the resulting interdependencies can cause multiple failures after large shocks. A social planner resolves this trade-off by creating a modular network structure with fire breaks, thereby preventing failures from small shocks while containing contagion. Socially efficient networks favor debt-holders over equity holders, meaning equity-holders can profitably trade away from these networks. Moreover, profitable trades for equity holders align their counter-parties’ failures with their own, creating systemic risk.
Régulation et Environnement
Du 06/03/2017 de 12:00 à 14:00
Salle 8, RDC Bâtiment G, Campus Jourdan, 48 boulevard Jourdan, 75014 Paris
ARMSTRONG Mark (University of Oxford)
Ordered Consumer Search