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Bank Regulation, Network Topology, and Systemic Risk: Evidence from the Great Depression / Sanjiv R. Das, Kris James Mitchener, Angela Vossmeyer.
- Format:
- Book
- Author/Creator:
- Das, Sanjiv R.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w25405.
- NBER working paper series no. w25405
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2018.
- Summary:
- We study how bank regulation interacts with network topology to influence systemic stability. Employing unique hand-collected data on the correspondent network for all U.S. banks on the eve of the Great Depression and a methodology that captures bank credit risk and network position, we explore how the pyramid-shaped network topology was inherently fragile and systemically risky. We measure its contribution to banking distress in the early 1930s, and show that a bank's network position as well as the risk of its network neighbors are strong predictors of bank survivorship. Institutional alternatives, such as branch banking, and alternative topologies appear to deliver networks that are more stable than the network that existed in 1929.
- Notes:
- Print version record
- December 2018.
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