Results

Journal article

American Economic Review:

The sovereign-bank diabolic loop and esbies

We propose a simple model of the sovereign-bank diabolic loop, and establish four results. First, the diabolic loop can be avoided by restricting banks' domestic sovereign exposures relative to their equity. Second, equi...Read more...

CEP discussion paper

The sovereign-bank diabolic loop and ESBies

We propose a simple model of the sovereign-bank diabolic loop, and establish four results. First, the diabolic loop can be avoided by restricting banks domestic sovereign exposures relative to their equity. Second, equit...Read more...