Improving China's Bank Regulation to Avoid the Asian Bank Contagion

Understanding Bank-Run Contagion

We study experimental coordination games to examine through which transmission channels, and under which information conditions, a panic-based depositor-run at one bank may trigger a panic-based depositor-run at another bank. We find that withdrawals at one bank trigger withdrawals at another bank by increasing players’ beliefs that other depositors in their own bank will withdraw, making them ...

Understanding Bank Regulation - New Approaches to Improving the Bank Oversight System

Laraine Laudati for suggesting some of the legislative history and other citations and for providing legal insights important to this article.

Moral hazard , bank runs and contagion

We study banking with ex ante moral hazard. Resolving the mis-alignment of the incentives between banks and depositors requires early liquidation with positive probability: e¢cient risk-sharing between depositors is no longer implementable. In a closed region with a single bank, we show that (i) with costless and perfect monitoring, contracts with bank runs o¤ the equilibrium path of play impro...

Big data models of bank risk contagion

A very important area of financial risk management is systemic risk modelling, which concerns the estimation of the interrelationships between financial institutions, with the aim of establishing which of them are more central and, therefore, more contagious/subject to contagion. The aim of this paper is to develop a systemic risk model which, differently from existing ones, employs not only th...

Asian Development Bank Strategy for the Pacific