Macroprudential Regulation Under Repo Funding /

The use of collateral has become one of the most widespread risk mitigation techniques. While it brings stabilizing effects to the individual lender we argue that it may exacerbate systemic risk through margin call activation. We show how a liquidity shock to the cash lender may propagate as a solve...

Deskribapen osoa

Xehetasun bibliografikoak
Egile nagusia: Valderrama, Laura
Formatua: Aldizkaria
Hizkuntza:English
Argitaratua: Washington, D.C. : International Monetary Fund, 2010.
Saila:IMF Working Papers; Working Paper ; No. 2010/220
Sarrera elektronikoa:Full text available on IMF
LEADER 01766cas a2200241 a 4500
001 AALejournalIMF006753
008 230101c9999 xx r poo 0 0eng d
020 |c 5.00 USD 
020 |z 9781455208852 
022 |a 1018-5941 
040 |a BD-DhAAL  |c BD-DhAAL 
100 1 |a Valderrama, Laura. 
245 1 0 |a Macroprudential Regulation Under Repo Funding /  |c Laura Valderrama. 
264 1 |a Washington, D.C. :  |b International Monetary Fund,  |c 2010. 
300 |a 1 online resource (37 pages) 
490 1 |a IMF Working Papers 
500 |a <strong>Off-Campus Access:</strong> No User ID or Password Required 
500 |a <strong>On-Campus Access:</strong> No User ID or Password Required 
506 |a Electronic access restricted to authorized BRAC University faculty, staff and students 
520 3 |a The use of collateral has become one of the most widespread risk mitigation techniques. While it brings stabilizing effects to the individual lender we argue that it may exacerbate systemic risk through margin call activation. We show how a liquidity shock to the cash lender may propagate as a solvency shock via liquidity hoarding even if the cash lender remains solvent in all states of nature. Albeit a cost-effective response of the cash lender to a liquidity shock, liquidity hoarding may lead to the bankruptcy of its repo counterparties triggering contagion across asset classes. To buttress the resilience of the financial system, we lay out a menu of macroprudential policies that deactivate this channel of financial contagion. 
538 |a Mode of access: Internet 
830 0 |a IMF Working Papers; Working Paper ;  |v No. 2010/220 
856 4 0 |z Full text available on IMF  |u http://elibrary.imf.org/view/journals/001/2010/220/001.2010.issue-220-en.xml  |z IMF e-Library