In this paper we suggest a new approach to risk assessment for banks. Rather than looking at them individually we analyze risk at the level of the banking system. Such a perspective is necessary because the complicated network of mutual credit obligations can make the actual risk exposure of the entire system invisible at the level of individual institutions. We apply our framework to a cross s...

We explore a model of the interaction between banks and outside investors in which the ability of banks to issue inside money (short-term liabilities believed to be convertible into currency at par) can generate a collapse in asset prices and widespread bank insolvency. The banks and investors share a common belief about the future value of certain long-term assets, but they have different obje...

Bankruptcies have historically followed the business cycle closely. Failure of certain company strategies is a natural part market economy’s process. When firm fails, optimum outcome for society quick renegotiation between financiers, to fund going concern with new structure obligations and management team. The purpose bankruptcy legislation recover an entity’s debt distribute its assets among ...

In the aftermath of global financial crisis EU bank resolution regime went through fundamental changes that seek to preserve stability and ensure continuity critical functions. The same cannot be said insolvency rules applicable non-financial enterprises. Unlike with its macroprudential proactive focus, law has largely remained microprudential reactive. Admittedly, unlike failures, corporate in...

Little is known about the effects of green performance on corporate insolvency risk. This study examines relationship between and firm risk from both theoretical empirical perspectives. Using a panel 179 US firms included in Newsweek Green Rankings system generalised method moments estimation which generates endogeneity-robust regression coefficients, we found that with higher are at lower inso...