Friday Seminar - "Asset Transfers and Self-Fulfilling Runs" - Joshua Weiss (IIES)
"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.
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Room Heckscher-Ohlin, SSE main building, entrance via Bertil Ohlins Gata 4 at 10:30
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Heckscher - Ohlin room, SSE main building, entrance via Bertil Ohlins Gata 4 at 10:30
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Room Ragnar, SSE main building, entrance via Bertil Ohlins Gata 4 at 10:30