The formation of financial networks

Modern banking systems are highly interconnected. Despite various benefits, linkages between banks carry the risk of contagion. In this article, I investigate whether banks can commit ex ante to mutually insure each other, when there is contagion risk in the financial system. I model banks' dec...

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Bibliographic Details
Published in:The Rand journal of economics 2016-07, Vol.47 (2), p.239-272
Main Author: Babus, Ana
Format: Article
Language:English
Subjects:
Agreements
Banking
Banking industry
Banking system
Contagion
Decision making models
Equilibrium
Financial systems
Networks
Risk
Social networks
Studies
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