| Article ID | Journal | Published Year | Pages | File Type |
|---|---|---|---|---|
| 959537 | Journal of Financial Economics | 2012 | 17 Pages |
Abstract
⺠We present a new model of shadow banking with several results. ⺠Growth of shadow banking is driven by growth in outside wealth. ⺠Banks hold AAA-rated assets as collateral for riskless debt finance. ⺠Bank assets and leverage are procyclical. ⺠Banks retain systematic risk as they diversify idiosyncratic risk. ⺠When investors neglect tail downside risk, banks are vulnerable to massive losses and liquidity dryups.
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Accounting
Authors
Nicola Gennaioli, Andrei Shleifer, Robert Vishny,