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Friday Seminar - "Asset Transfers and Self-Fulfilling Runs" - Joshua Weiss (IIES)

Joshua Weiss, Assistant Professor at IIES, Stockholm University, will present his research at SSE main building (Room A720) on Friday, March 22 at 10:30 CET.

"Asset Transfers and Self-Fulfilling Runs"

Abstract: We introduce a new mechanism that eliminates self-fulfilling runs on a Diamond Dybvig intermediary without requiring deposit insurance. During a run, a depositor can take unliquidated intermediary assets in exchange for closing their account. We show our mechanism would have been useful in the most recent banking crisis. We also show our mechanism improves upon suspension if policy makers have limited commitment, depositors repeatedly interact with the intermediary, and/or there is aggregate return risk.

Read the paper

Dept. of Finance Friday seminars