Bad Banks Choking Good Banks: Simulating Balance Sheet Contagion (Khalil S., Kinsella S.)

Contagion in Banking Structure of Assets&Liabilities

Abstract We investigate the propogation of contagion through banks' balance sheets in a two-country model. We simulate an increase in non-performing loans in one bank, and study the effects on other banks and the macro economy of each country. We show that credit crunches destabilize each economy in the short run and in the long run reduce potential output. We quantify this loss.
External link


Libref/ Khalil S., Kinsella S. (2011) "Bad Banks Choking Good Banks: Simulating Balance Sheet Contagion", Geary Institute, University College Dublin Working Paper No.201126
© Программирование — Александр Красильников, 2008
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