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Systemic Risk – The Dynamics of Modern Financial Systems | Oxford Scholarship Online
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Systemic Risk: The Dynamics of Modern Financial Systems

Prasanna Gai

Abstract

This book opens new ground in the study of financial crises. It treats the financial system as a complex adaptive system and shows how lessons from network disciplines—such as ecology, epidemiology, and statistical mechanics—shed light on our understanding of financial stability. Using tools from network theory and economics, it suggests that financial systems are robust-yet-fragile, with knife-edge properties that are greatly exacerbated by the hoarding of funds and the fire sale of assets by banks. The book studies the damaging network consequences of the failure of large interconnected inst ... More

Keywords: systemic risk, financial networks, contagion, financial crises, stress testing, interbank markets, liquidity risk, macroprudential policy, covered bonds, bank funding

Bibliographic Information

Print publication date: 2013 Print ISBN-13: 9780199544493
Published to Oxford Scholarship Online: May 2013 DOI:10.1093/acprof:oso/9780199544493.001.0001

Authors

Affiliations are at time of print publication.

Prasanna Gai, author
Professor of Macroeconomics, University of Auckland