2026-09-19T20:11:23Zhttps://dspace.mit.edu/server/oai/requestoai:dspace.mit.edu:1721.1/1228742021-07-05T14:03:20Zcom_1721.1_7582com_1721.1_7581col_1721.1_131023
Asu Ozdaglar.
Siderius, James.
Massachusetts Institute of Technology. Department of Electrical Engineering and Computer Science.
Massachusetts Institute of Technology. Department of Electrical Engineering and Computer Science
2019-11-12T17:40:47Z
2019-11-12T17:40:47Z
2018
2018
https://hdl.handle.net/1721.1/122874
1126651820
Thesis: S.M., Massachusetts Institute of Technology, Department of Electrical Engineering and Computer Science, 2018
Cataloged from PDF version of thesis.
Includes bibliographical references (pages 131-134).
We consider a network model of financial intermediation where banks (financial intermediaries) lend to and borrow from each other and supply funds to clients. A key decision for a bank is whether to extend credit to other banks, which may then default on those loans. In contrast to much of the previous literature on financial networks, the focus is on how "fear of future default" can lead to "credit freezes" before the realization of these uncertainties. Specifically, we show that increases in the riskiness of one or few banks can lead to systemic credit freeze throughout the financial network. Notably, credit freezes can happen in parts of the network that are not directly affected by increased uncertainty, both because the potential consequences of uncertainty travel throughout the network and also because such changes affect profitability of loans between different parties. We then use this framework to analyze the effects of policy interventions on systemic credit freezes.
by James Siderius.
S.M.
S.M. Massachusetts Institute of Technology, Department of Electrical Engineering and Computer Science
134 pages
eng
Massachusetts Institute of Technology
MIT theses are protected by copyright. They may be viewed, downloaded, or printed from this source but further reproduction or distribution in any format is prohibited without written permission.
http://dspace.mit.edu/handle/1721.1/7582
Electrical Engineering and Computer Science.
Propagation of credit freezes in financial lending networks
Thesis
application/pdf
2019-11-12T17:40:46Z
Publication
Master
EECS
unknown
unknown
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