| Budget Amount *help |
¥910,000 (Direct Cost: ¥700,000、Indirect Cost: ¥210,000)
Fiscal Year 2013: ¥390,000 (Direct Cost: ¥300,000、Indirect Cost: ¥90,000)
Fiscal Year 2012: ¥520,000 (Direct Cost: ¥400,000、Indirect Cost: ¥120,000)
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| Research Abstract |
This paper provides a framework that multiple bank runs and a sovereign debt default occur simultaneously. Banks invest their deposits to a government bond. If a bank run occurs, banks redeem the bond and, therefore, the possibility of the government defaulting heightens. Moreover, this, in turn, aggravates the banking crises. In the situation where such a vicious circle exits, we show that the lender-of-last-resort (LLR) facility by the government cannot prevent one solvent but illiquid bank, even brings another solvent and liquid bank to be ensnared in bank run. These findings imply that LLR facility not by the domestic government but by an international institution is required.
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