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Interbank Networks and Backdoor Bailouts: Benefiting from other Banks' Government Guarantees
This paper explains why banks derive a benefit from being highly interconnected. We show that when banks are protected by government guarantees they can significantly increase their expected returns by channeling funds ...
On the Impact of Leveraged Buyouts on Bank Systemic Risk
Although banks are at the center of systemic risk, there are other institutions that contribute to it. With the publication of the leveraged lending guideline in March 2013, the U.S. regulators show that they are especially ...