Many of the origins of the recent financial crisis were in the United States, beginning with subprime mortgages and mortgage securities. As the crisis spread globally, few market participants or regulatory authorities saw it coming, and all underestimated its severity. In the United States, the crisis has sparked many proposals to address its perceived causes and prevent a recurrence. Proposals...

The global financial crisis that began in 2007 has forced a re-examination of risk transmission in the financial sector and how it affects financial stability. Risk management concentrates on the analysis of risk at the level of the individual institution and system-wide. This paper illustrates how contingent claims analysis (CCA) can be applied in new ways to improve systemic financial sector ...

According to some, the commercial bank -an institution that conducts the twin activities of accepting deposits payable on demand and originating loans -is anachronistic and in a state of terminal decline. The evidence, however, is somewhat mixed. This paper takes a different approach to analyzing the future of banks: I examine whether there is an economic rationale for their existing in the pas...