Policy insights

Policy Insights

Policy Insight 52: Systemic liquidity risk and bankruptcy exceptions

This Policy Insight highlights how the 2005 bankruptcy changes created a negative externality for all intermediaries in liquidity runs, the leading cause of shock propagation in the credit crisis.

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Perotti, E (2010), Policy Insight 52: Systemic liquidity risk and bankruptcy exceptions, CEPR Policy Insight No 52, CEPR Press, Paris & London. https://cepr.org/publications/policy-insight-52-systemic-liquidity-risk-and-bankruptcy-exceptions