| Budget Amount *help |
¥4,030,000 (Direct Cost: ¥3,100,000、Indirect Cost: ¥930,000)
Fiscal Year 2015: ¥650,000 (Direct Cost: ¥500,000、Indirect Cost: ¥150,000)
Fiscal Year 2014: ¥650,000 (Direct Cost: ¥500,000、Indirect Cost: ¥150,000)
Fiscal Year 2013: ¥2,730,000 (Direct Cost: ¥2,100,000、Indirect Cost: ¥630,000)
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| Outline of Final Research Achievements |
I introduce a model of banks that have debts of different levels of seniority between one another, such as loans and other exposure to default risk.
Seniority determines the order in which debts are repaid in the event of bankruptcy. It can be so important during crises, in fact, that institutions sometimes dispute which debts are more senior than others. However, the effect of seniority structure on the risk of systemic crises is inadequately understood.
By unraveling this dimension of the financial system, I and my collaborator not only generalize prominent cascade models in the physics and economics literature, but we also find new ways in which regulators might tame systemic risk.
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