The DOI matches its Crossref record; 21 of the 21 references it cites were found in a registry or an index.
Systemic Risk, Interbank Relations, and Liquidity Provision by the Central Bank
Abstract
We model systemic risk in an interbank market. Banks face liquidity needs as consumers are uncertain about where they need to consume. Interbank credit lines allow to cope with these liquidity shocks while reducing the cost of maintaining reserves. However, the interbank market exposes the system to a coordination failure (gridlock equilibrium) even if all banks are solvent. When one bank is insolvent, the stability of the banking system is affected in various ways depending on the patterns of payments across locations. We investigate the ability of the banking system to withstand the insolvency of one bank and whether the closure of one bank generates a chain reaction on the rest of the system. We analyze the coordinating role of the Central Bank in preventing payments systemic repercussions and we examine the justification of the Too-big-to-fail-policy.
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Citations
Cites
Bank Runs, Deposit Insurance, and Liquidity
Diamond, D. W., & Dybvig, P. H. (1983) · Journal of Political Economy · doi:10.1086/261155 · Cited by 9,369
Monopolistic Competition with Outside Goods
Salop, S. C. (1979) · The Bell Journal of Economics · doi:10.2307/3003323 · Cited by 2,975
The Role of Demandable Debt in Structuring Optimal Banking Arrangements
Calomiris, C. W., & Kahn, C. M. (1991) · American Economic Review · doi:10.7916/d8th8x53 · Cited by 1,470
Allen, F., & Gale, D. (1998) · The Journal of Finance · doi:10.1111/0022-1082.00052 · Cited by 1,010
BANKING PANICS AND BUSINESS CYCLES *
GORTON, G. (1988) · Oxford Economic Papers · doi:10.1093/oxfordjournals.oep.a041885 · Cited by 905
Distinguishing Panics and Information-based Bank Runs: Welfare and Policy Implications
Jacklin, C. J., & Bhattacharya, S. (1988) · Journal of Political Economy · doi:10.1086/261552 · Cited by 709
Interbank Lending and Systemic Risk
Rochet, J.-C., & Tirole, J. (1996) · Journal of Money, Credit and Banking · doi:10.2307/2077918 · Cited by 655
Self-citationPreference shocks, liquidity, and central bank policy
Bhattacharya, S., & Gale, D. (1987) · New Approaches to Monetary Economics · doi:10.1017/cbo9780511759628.005 · Cited by 510
Contagion and Bank Failures During the Great Depression: The June 1932 Chicago Banking Panic
Calomiris, C., & Mason, J. (1994) · National Bureau of Economic Research · doi:10.3386/w4934 · Cited by 461
The Role of Demandable Debt in Structuring Optimal Banking Arrangements
Calomiris, C. W., & Kahn, C. M. (2004) · Credit, Intermediation, and the Macroeconomy · doi:10.1093/oso/9780199242948.003.0003 · Cited by 434
Cited by
Contagion in financial networks
Gai, P., & Kapadia, S. (2010) · Proceedings of the Royal Society A: Mathematical, Physical and Engineering Sciences · doi:10.1098/rspa.2009.0410 · Cited by 1,163
Competition and Financial Stability
Allen, F., & Gale, D. (2004) · Journal of Money, Credit, and Banking · doi:10.1353/mcb.2004.0038 · Cited by 1,137
Liaisons dangereuses: Increasing connectivity, risk sharing, and systemic risk
Battiston, S., Delli Gatti, D., Gallegati, M., Greenwald, B., & Stiglitz, J. E. (2012) · Journal of Economic Dynamics and Control · doi:10.1016/j.jedc.2012.04.001 · Cited by 734
A Survey of Systemic Risk Analytics
Bisias, D., Flood, M., Lo, A. W., & Valavanis, S. (2012) · Annual Review of Financial Economics · doi:10.1146/annurev-financial-110311-101754 · Cited by 659
Allen, F., & Babus, A. (2008) · SSRN Electronic Journal · doi:10.2139/ssrn.1094883 · Cited by 365
Metadata
- Authors
- Freixas, X., Parigi, B. M., & Rochet, J.-C.
- Venue
- Journal of Money, Credit and Banking
- Publisher
- JSTOR
- Published
- 2000-08
- Volume
- 32
- Issue
- 3
- Pages
- 611
- ISSN
- 0022-2879 (ISSN-L)
- OpenAlex
- W1559496943
- Cited by
- 1,379
- References
- 21
- FWCI
- 24.84
- Type
- journal article
- Language
- en
- Open access
- closed
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- Freixas, X., Parigi, B. M., & Rochet, J.-C. (2000). Systemic Risk, Interbank Relations, and Liquidity Provision by the Central Bank. Journal of Money, Credit and Banking. https://doi.org/10.2307/2601198
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Contains information from the Semantic Scholar Academic Graph Datasets, made available under the ODC Attribution License (ODC-BY 1.0).
Semantic Scholar’s data is described in: Kinney, R., et al. (2023). The Semantic Scholar Open Data Platform. arXiv:2301.10140.
