Monetary Circuit Theory

Monetary Circuit Theory has two roots – France and Italy.



The concept of the circuit was first used in economics by the Physiocrats of 18th century France. They viewed production as a cycle beginning with advances, that is, capital expenditure, and ending when the goods that had been produced were sold. To that extent, the late 20th century revival of the circuit concept by Bernard Schmitt (1960, 1966, 1984), Jacques Le Bourva (1962), Alain Barrère (1979, 1990) and Alain Parguez (1975), was a salute to a French tradition. This is not the whole story, though. Circuitist thinking, although usually unsung, has in fact underpinned many approaches to economics from Marx to Keynes by way of Wicksell,1 Schumpeter, Kalecki and J. Robinson.2 Indeed, today’s French circuit school owes much to Keynes, to whom Schmitt, Barrère and Parguez all referred extensively. And it is Keynes’s heterodoxy, as opposed to the conventional neo-classical view of Keynes’s economics, that was their source of inspiration. Hence the affinities of French circuitists with post-Keynesians (for a detailed review of common ground and differences, see Deleplace and Nell, 1996, Arena, 1996, Rochon, 1999a).

Circuit theory also counts an Italian branch which emerged in the 1980s on Graziani’s (1989, 2003) initiative and which explicitly focuses on Keynes’s monetary theory of production (cf. Fontana and Realfonzo, 2005). French and Italian circuitist approaches have also inspired post-Keynesians outside Europe, especially in Canada (Lavoie, 1984; Rochon, 1999; and Seccareccia, 1996). This affinity between circuit theory and Keynes’s heterodoxy and now post-Keynesian theory will be a recurrent theme in this paper. It should help readers familiar with post-Keynesian literature to grasp the significance of the circuit approach and help also to confirm its veracity. 


Circuitists see the economy, meaning the present-day monetary economies of production, as being based on an asymmetrical (hierarchical) relationship between firms (or entrepreneurs) and workers. Firms employ workers and pay them money wages. In spending their money wages, workers gain access to a fraction of the output, the size of that fraction varying according to the price they pay for goods in markets. Symmetrically, firms earn profits formed by the surplus of the price received for the goods sold over the wage-bill the firms paid out, allowing them and their backers to appropriate the complementary part of the output.

First, it shall be seen that the features outlined here set circuit theory apart from the neoclassical view inherited from Smith (1776) and extended by Walras (1926), by which the economy is composed of individual agents who simultaneously supply their productive services on a first set of markets and create demand on a second set for the goods produced. To be clear, circuitists do not of course deny the existence of markets and the correlated role of supply and demand in determining wages and prices. What they refute, by reference to Keynes’s notion of the entrepreneur economy, is the idea that market transactions may ultimately be seen as mere exchanges of productive services and goods for one another, with the terms of trade supposedly being determined through adjustments taking place in interdependent markets in conformity with the agents’ preferences. Secondly, it will be confirmed that the circuitist approach, as its proponents argue, implicitly underpins Keynes’s principle of effective demand to which circuitists therefore subscribe. 


Key Sources of Research:


Circuit and Coherent Stock-Flow Accounting

Marc Lavoie

October 2001

Click to access graziani_lavoie.pdf



Claude Gnos

Click to access v_2005_10_28_gnos.pdf


Some Simple, Consistent Models of the Monetary Circuit

Gennaro Zezza,

April 2004

Click to access wp405.pdf


Finance and Crisis: Marxian, Institutionalist and Circuitist approaches

Georgios Argitis
Trevor Evans
Jo Michell
Jan Toporowski

Click to access Finance-and-crisis-Marxian-Insitutionalist-and-Circuitist-Approaches-WP-39-1.pdf


Financialisation and the Limits of Circuit Theory

Photis Lysandrou

Click to access PL300514.pdf


October 28-29, 2005,

Jean-Vincent ACCOCE



Click to access v_2005_10_28_accoce_mouakil.pdf





Click to access MVP%20ROPE%202014.pdf



The Dynamics of the Monetary Circuit

Steve Keen


Click to access 9780230_203372_10_cha09.pdf



The theory of the monetary circuit and economic policy in Augusto Graziani. An assessment from an early Italian circuitist perspective, and a first comparison with Alain Parguez


Riccardo Bellofiore


Click to access Bellofiore.pdf

Do Shadow Banks Create Money?
Financialisation and Monetary Circuit
Jo Mitchell



Modern Monetary Circuit Theory, Stability of Interconnected Banking Network, and Balance Sheet Optimization for Individual Banks

Alexander Lipton

October 27, 2015



Financial-real side interactions in the Monetary Circuit: Loving or Dangerous Hugs?

Alberto Botta, Eugenio Caverzasi, Daniele Tori




Duccio Cavalieri



Morris Copeland and Flow of Funds accounts

Social Accounting Ideas

  • NIPA – Simon Kuznets, Wesley Mitchell, Richard Stone, James Meade
  • Flow of Funds Accounts – Morris Copeland
  • Input Output Tables – Wassily Leontief
  • Social Accounting Matrix – Richard Stone, Graham  Pyatt, Erik Thorbecke


Morris Copeland and Financial Accounts



In 1944, Copeland was commissioned by the National Bureau of Economic Research (NBER) to create a statistical framework for the money circuit. The project was carried out in collaboration with the Federal Reserve, in particular the Board’s Division of Research and Statistics. After the First World War, Wesley Mitchell had built annual estimates of national income while working at the NBER.2 Copeland started from an unpublished memo that Mitchell had written in 1944, in which the economy was divided into four groups of units. Each group makes payments to and receives payments from the others. In double-entry accounts, the payments made by each group are recorded on one side and the payments received on the other. All payments appear among the liabilities of one group and the assets of another.

Copeland’s work was first published in 1947, in an article in the American Economic Review. His principal work, published in 1952, analysed the moneyflows of U.S. institutional sectors from 1936 to 1942.3 The initial project envisaged two sectors – households, and an aggregate of the other sectors – and six types of moneyflows. The analysis was later extended to eleven sectors: households; farms; industrial corporations; business proprietors and partnerships; the federal government; state and local governments; banks and US monetary funds; life insurance companies; other insurance carriers; other financial intermediaries not included in the above categories; and the rest of the world.

Copeland identifies four origins of moneyflows, or motivations: households’ distributive shares, households’ product transactions, secondary distribution (i.e. transfer payments), and flows through financial channels. There are fourteen types of moneyflows, all of which can be traced to one of these four motivations. Four moneyflows can be attributed to households’ distributive shares: wages and salaries, cash dividends, cash interest, and net owner take-outs. A further four are the result of production transactions: customers’ payments to firms for goods and services; rents; instalments to contractors; payments for real-estate sales. Five moneyflows – insurance premiums, insurance benefits, taxes collected, tax refunds, and public purpose expenditures – fall into the category of transfer payments. The fourteenth moneyflow consists in financial transactions and constitutes the fourth motivation.

The statistics built by Copeland provide information on the distribution of moneyflows between production transactions, transfer payment transactions, and transactions through financial channels. Every sector has its own balance sheet, with its own assets and liabilities. A distinction is maintained throughout between aggregates measured on a cash basis and those on an accrual basis, although Copeland himself prefers the first method. Moneyflows are presented as an extension of the national accounts, on which Copeland had written extensively since the end of the 1920s; moneyflows are constantly compared with the concept of national income, underlining analogies and differences. Copeland states that both his approach and the national income one are based on the notion of the economy as a circuit. The moneyflows approach makes it possible to analyse debit and credit movements that are not part of the concepts of production and income distribution.


Copeland describes his work as an extension of ‘social accounting to moneyflows measurement’,4 highlighting the advantages of his approach over the equation of exchange. In particular, the disaggregate approach produces ‘money inflows’ and ‘money outflows’ for each sector. Despite the different definition given to the institutional sectors, Copeland maintains that Leontief’s work is similar to his own.5 Moneyflows go from one sector of the economy to another, with liabilities financing assets. Leontief talks of inputs producing outputs. There is a visual similarity between the two approaches, as the phenomena are measured by constructing large double-entry matrices.

In addition to moneyflows, Copeland also considers stocks, which are measured by loanfunds, that is financial assets and liabilities of institutional sectors. He cites Irving Fisher’s The Nature of Capital and Income of 1906, which draws a distinction between stocks and flows. Copeland stresses the importance of using financial statements in economics, following an approach already adopted by Robertson, Mitchell, Hawtrey, Lutz, Hicks and others.6 He recalls the difficulty of communication between accounting and statistics, principally because of the different conventions they employ.

Copeland makes a sharp distinction between consolidated statements, in which positions between sectors are net of reciprocal transactions, and combined statements, which include all transactions between sectors. He examines issues on which economists and statisticians are still working, such as the differences between real accounts and financial accounts, and, in the case of business proprietors, the distinction between assets belonging to the business and assets of the proprietor’s family. He points to the difficulties of ‘balancing’ the total assets and liabilities of the economy caused by three differences: in the timing of entry of transactions; in their classification of identical items; and in the evaluation criteria applied to assets and liabilities.


As mentioned earlier, Copeland’s work ties in with various lines of analysis, which are themselves linked to one another. The first connection is with the developments in national accounts that followed Keynes’s General Theory. As Federico Caffè recalled, Keynes invented not only a discipline, but also the words to describe it, setting the national accounts on a new basis. The process was not an easy one. Blanchard described macroeconomics before the Second World War as ‘an age of confusion’. After Keynes, progress in national accounts can be attributed mainly to Kuznets, Stone, and Hicks (the first edition of The Social Framework is dated 1942); a major effort of organisation produced the United Nations’ System of National Accounts (SNA) of 1947. Copeland had already studied the national accounts before the Second World War, publishing papers in the NBER series Studies in Income and Wealth. His essays of 1935 (‘National Wealth and Income – An Interpretation’) and 1937 (‘Concepts of National Income’) were cited by Richard Stone in the preparatory work for the SNA. Afterwards, when the concepts of real national accounts had been codified, it was a natural step to move on to the notion of financial accounts.

Another inspiration for moneyflows was the debate on the business cycle, in particular Mitchell’s efforts to collect relevant statistics. Mitchell and Copeland were very close and the moneyflows project was the last Mitchell undertook before retiring. Moneyflows are part of the American tradition of institutionalism – stretching from Veblen to Commons and from Ayres to Mitchell himself – which stresses the importance of an empirical approach to the interpretation of economic phenomena and the need to build statistics based on time series.10 It is not an obvious approach: Koopmans’s cutting verdict, ‘measurement without theory’, appeared in 1947 in a review of Burns and Mitchell’s book on the measurement of economic cycles.11

Copeland’s approach was also predominantly empirical. He reproaches Keynes that the latter’s theoretical approach was one of the reasons the General Theory had been assimilated in the Neoclassical Synthesis.12 Copeland had already attacked the abstraction of the neoclassical approach in 1931, causing Frank Knight to express several reservations.13 However, it would be wrong to classify Copeland’s contribution as empirical only, and to level against him the same accusation that Koopmans made against the Burns-Mitchell duo. Copeland has in mind not only the work of Keynes, but also that of Hicks, notably Value and Capital, which was first published in 1939, and in particular Chapter 14 on the difficulties of defining and measuring an economy’s income, and Chapter 19 on the demand for money. He asserts that a similarity exists between his ideas and those put forward in Value and Capital, underlining that Hicks focuses only on households and firms. Basically, Copeland has a vision of an economic system with a wealth of specialised and interconnected activities that is co-ordinated by institutions of the law: property rights, regulations governing contracts and negotiable instruments, rules on compensation and bankruptcy, and freedom of association. Money and other ‘pecuniary institutions’ are further elements that allow an economy to function.14 After the essays on moneyflows he remained interested in money, particularly the origin of monetary economies and the development of bank money. His interest in all the institutional sectors of the economy led him to study the US general government debt, with strong emphasis on relations between the federal government, on one side, and state and local bodies, on the other.15


Key Sources of Research:




by Louis Bê Duc and Gwenaël Le Breton



Click to access ecbocp105.pdf


Balance Sheets, Transaction Matrices and the Monetary Circuit

Lavoie and Godley 2007

Book of Monetary Economics chapter 2


Click to access Godley%20Lavoie%202007%20chap02-1.pdf


The Flow-of Funds Approach to Social Accounting: Appraisals, Analysis, and Applications

Conference on Research in Income and Wealth

Published in 1962 by Princeton University Press


Copeland on money as electricity

Anne Mayhew



Click to access Mayhew53.pdf


A Study of Moneyflows in the United States

Morris A. Copeland



Credit Aggregates from the Flow of Funds Accounts

Milton P. Reid, III and Stacey L. Schreft


Financial Accounts of the United States

Flow of Funds, Balance Sheets,
and Integrated Macroeconomic Accounts


Click to access z1.pdf


Financial Accounts:
History, Methods, the Case of Italy and International Comparisons

Papers presented at the conference held in Perugia, 1-2 December 2005


A Guide to the Integrated Macroeconomic Accounts


By Takashi Yamashita


Click to access 0413_macro-accts.pdf


U.S. Flow of Funds Accounts


Click to access USflow.pdf


The U.S. Flow of Funds Accounts and Their Uses


Click to access 0701lead.pdf


De Bonis, Riccardo, and Alfredo Gigliobianco.

“The origins of financial accounts in the United States and Italy: Copeland, Baffi and the institutions.”

The Financial Systems of Industrial Countries. Springer Berlin Heidelberg, 2012. 15-49.


Financial Accounts in Historical Perspective


Studi e Note di Economia, Anno XVI, n. 1-2011, pagg. 105-114


Classical roots of Interdependence in Economics


When did economists start thinking systematically?

Where do we find it now in Economics?

  • Systems Thinking
  • Interdependence
  • Interconnectedness


From  Structural Interdependence in Monetary Economics: Theoretical Assessment and Policy Implications


Acknowledgment of the existence of structural interconnections in a sufficiently developed country is not a novelty in the literature of economics. It has been present since its very beginning, in Quesnay’s Tableau Économique and Petty’s and Cantillon’s descriptions of production and consumption as a circular flow. Significant evidence of structural interdependence is provided by Walras’s general equilibrium model, by Marx’s reproduction schemes and by his circuit of capital, by Keynes’s dismissal of the ‘classical’ assumption of a dichotomic economic system, by Leontief’s inter-industry input-output analysis, and by other analytical approaches (von Neumann and Morgenstern strategic game theory, Copeland’s flow-of-funds tables, Koopmans’s activity analysis of production and allocation).


Relevant contributions to the literature on structural interdependence in economics have been made by Tobin, Davidson, Meade and Stone, Godley and Cripps, Lavoie, Lance Taylor and others, with reference to specific institutional frameworks. In the last decades this branch of research has attracted increasing attention. Sectoral flows of funds connecting balance sheets have been analyzed. Some controversial issues, however, regarding the integration of money and finance in the theory of value and the structural relations between stock and flow variables, are still partially unsettled.


From ‘Classical’ Roots of Input-Output Analysis: A Short Account of its Long Prehistory


According to Wassily Leontief, ‘Input-output analysis is a practical extension of the classical theory of general interdependence which views the whole economy of a region, a country and even of the entire world as a single system and sets out to describe and to interpret its operation in terms of directly observable basic structural relationships’ (Leontief, 1987, p. 860).


The key terms in this characterisation are ‘classical theory’, ‘general interdependence’ and ‘directly observable basic structural relationships’. In this overview of contributions that can be said to have prepared the ground for input-output analysis proper, ‘classical theory’ will be interpreted to refer to the contributions of the early classical economists from William Petty to David Ricardo; further elaborated by authors such as Karl Marx, Vladimir K. Dmitriev, Ladislaus von Bortkiewicz and Georg von Charasoff; and culminating in the works of John von Neumann and Piero Sraffa. ‘General interdependence’ will be taken to involve two intimately intertwined problems, which, in a first step of the analysis, may however be treated separately. First, there is the problem of quantity for which a structure of the levels of operation of processes of production is needed in order to guarantee the reproduction of the means of production used up in the course of production and the satisfaction of some ‘final demand’, that is, the needs and wants of the different groups (or ‘classes’) of society, perhaps making allowance for the growth of the system. Secondly, there is the problem of price for which a structure of exchange values of the different products or commodities is needed in order to guarantee a distribution of income between the different classes of income recipients consistent with the repetition of the productive process on a given (or increasing) level. It is a characteristic feature of input-output analysis that both the independent and the dependent variables are to be ‘directly observable’, at least in principle. The practical importance of this requirement is obvious, but there is also a theoretical motivation for it: the good of an economic analysis based on magnitudes that cannot be observed, counted and measured is necessarily uncertain.


From ‘Classical’ Roots of Input-Output Analysis: A Short Account of its Long Prehistory

We shall see that input-output analysis can indeed look back at a formidable history prior to its own proper inception, which is often dated from the early writings of Wassily Leontief. These include his 1928 paper ‘Die Wirtschaft als Kreislauf’ (The economy as a circular flow) (Leontief, 1928) and his 1936 paper on ‘Quantitative input-output relations in the economic system of the United States’ (Leontief, 1936); because of its applied character, the latter is occasionally considered ‘the beginning of what has become a major branch of quantitative economics’ (Rose and Miernyk, 1989, p. 229). The account of the prehistory of input- output analysis may also throw light on wider issues which played an important role in the past, but are commonly set aside in many, but not all modern contributions to input- output analysis. This concerns first and foremost the subject of value and distribution. While in earlier authors and also in Leontief (1928) that issue figured prominently, in modern contributions it is frequently set aside or dealt with in a cavalier way. This raises a problem, because production, distribution and relative prices are intimately intertwined and cannot, in principle, be tackled independently of one another. Scrutinizing the earlier literature shows why.


Key Sources of Research:


‘Classical’ Roots of Input-Output Analysis: A Short Account of its Long Prehistory

By Heinz D. Kurz and Neri Salvadori

Click to access 2000_Classical_Roots_of_Input-Output_Analysis__in_Economic_System_Research_.pdf



Who is Going to Kiss Sleeping Beauty? On the ‘Classical’ Analytical Origins and Perspectives of Input–Output Analysis



Click to access 2011_Who_Is_Going_To_Kiss_Sleeping_Beauty__On_the_‘Classical’_Analytical_Origins_and_Perspectives_of_Input-Output_Analysis__in_Review_of_Political_Economy_.pdf


Wassily Leontief: In appreciation

William J. Baumol and Thijs ten Raa


Click to access leontief%20ejhet.pdf


Wassily Leontief and L ́eon Walras: the Production as a Circular Flow

Akhabbar, Amanar and Lallement, J ́eroˆme Lausanne University, Centre Walras-Pareto, Centre d’Economie de la Sorbonne

Click to access 6706370.pdf


Input–Output Analysis from a Wider Perspective: a Comparison of the Early Works of Leontief and Sraffa


Click to access 2006_Input–Output_Analysis_from_a_Wider_Perspective__in_Economic_Systems_Research_.pdf



Impact Studies without Multipliers: Lessons from Quesnay’s Tableau Economique

Albert E. Steenge and Richard van den Berg


Click to access 2b2_Steenge.pdf



Causality and interdependence in Pasinetti’s works and in the modern classical approach

by Enrico Bellino  and Sebastiano Nerozzi

Click to access MPRA_paper_52179.pdf


Three centuries of macro-economic statistics

Frits Bos


Click to access MPRA_paper_35391.pdf


The Circularity of the Production Process


Click to access piccinini.pdf


Modeling the Economy as a Whole: An Integrative Approach



Click to access Lee.pdf


Structural Interdependence in Monetary Economics: Theoretical Assessment and Policy Implications

Duccio Cavalieri



Click to access MPRA_paper_62403.pdf


The agents of production are the commodities themselves On the classical theory of production, distribution and value

Heinz D. Kurz

Click to access 00b7d51824f248b1e4000000.pdf




Ángel Luis Ruiz Pedro F. Pellet



Stock-Flow Consistent Modeling

PK-SFC Modeling

  • Integration of Real and Financial sectors of economy.
  • Balance-sheet  accounting approach
  • Stock-flow consistent
  • Quadruple accounting


From  Post-Keynesian Stock-Flow Consistent Modeling: A Survey


PK-SFC models are a specific kind of Post-Keynesian macro model that follows distinctive accounting rules, ensuring the consistent integration of the stocks and flows of all the sectors of the economy. The models have three important methodological innovations: first, the consistency of the overall economy is maintained, since one sector’s outflows are always another sector’s inflows just as one sector’s liability is always another sector’s asset; second, the integration of the real and the financial side of the economy; third, the construction of the long run as a chain of short run periods. Nothing is lost, neither in space nor in time. These constraints are crucial in modeling modern macroeconomies which are highly complex, integrated systems.

The roots of PK-SFC models can be identified in the work of Morris A. Copeland (1949), who, with his study on “money flows,” is the father of the flow of funds approach. His intuition was to enlarge the social accounting perspective to the study of money flows. Copeland laid the foundations for an economic approach able to integrate real and financial flows of the economy. A concrete example of his legacy is represented by the quadruple-entry system: since someone’s inflow is someone else’s outflow, the standard double-entry system of accounting is doubled in a quadruple-entry system.

Copeland’s work certainly had a great influence on economics -mainly as a source of financial data- but its potential disruptive impact on the study and modeling of the interdependences between real and financial flows failed to occur. It was only in the 1980s, with the work of Nobel Laureate James Tobin, that these efforts culminated in the organizing theory advocated by Cohen. The article Tobin wrote with co-authors (Backus et al., 1980) perhaps best represents his path-breaking contribution in the foundation of PK-SFC models. Indeed, in developing an empirical model of the US economy in both its financial and non- financial sides, Backus et al combined the theoretical hypothesis on the behavior of the economy with a rigorous accounting framework based on the flow-of-funds social account developed by Copeland. The result is a stock-flow consistent model that includes some of the characteristics still peculiar in the literature, such as the matrices-based accounting approach and discrete time and other features, such as the stock- flow identity, which are fundamental in any model of this type.


Next to Tobin, the other scholar who played an essential role in the development of this family of models is Wynne Godley. Godley, head of the New Cambridge school in the 1980s, started developing models coherently integrating stocks and flows. His efforts culminated in the organized framework he developed in his more recent publications, with which he collected the legacy of Tobin. Godley’s contribution probably finds its peak in the seminal book he wrote together with Marc Lavoie (Godley and Lavoie, 2007), which is still the main reference for current PK-SFC practitioners. This paper focuses on the tradition descending from the work of Wynne Godley, hence the choice of talking of PK-SFC models rather than just SFC models.


Key Sources of Research:


Bezemer, Dirk J.

“The economy as a complex system: the balance sheet dimension.”



Click to access ACS_1250047_1st_Prf.pdf


‘No one saw this coming’ – or did they?

Dirk Bezemer

30 September 2009


A complex systems approach to constructing better models for managing financial markets and the economy

J. Doyne Farmer1, M. Gallegati2, C. Hommes3, A. Kirman4, P. Ormerod5, S. Cincotti6, A. Sanchez7, and D. Helbing8


Click to access EconFinancialFuturITC16.pdf


Money Creation and Financial Instability: An Agent-Based Credit Network Approach

Matthias Lengnick, Sebastian Krug, and Hans-Werner Wohltmann


Complex agent-based macroeconomics: a research agenda for a new paradigm

Domenico Delli Gatti

Edoardo Gaffeo

Mauro Gallegati


Click to access delligatti_gallegati.pdf



Growing fragilities? Balance sheets in The Great Moderation

Richard Barwell and Oliver Burrows


Click to access fs_paper10.pdf



Credit Money and Macroeconomic Instability in the Agent-based Model and Simulator Eurace

Silvano Cincotti, University of Genoa Marco Raberto, Reykjavik University Andrea Teglio, Universitat Jaume I



The Financial Instability Hypothesis: a Stochastic Microfoundation Framework

C. Chiarella and C. Di Guilmi


Click to access 09e4150ef5365dded1000000.pdf



The dynamics of the monetary circuit

Steve Keen



Debunking Macroeconomics

Steve Keen


Click to access 0c96051b9fcca21f5c000000.pdf



Causes of Financial Instability: Don’t Forget Finance

Dirk J. Bezemer

April 2011



Towards a New Monetary Paradigm: A Quantily Theorem of Disaggrcgated Credit, with Evidence from Japan

By Richard A. Werner


Click to access KK_97_Disaggregated_Credit.pdf



Schumpeter Might Be Right Again: The Functional Differentiation of Credit

Dirk J. Bezemer

Click to access the_functional_differentiation_of_credit.pdf



Banks As Social Accountants: Credit and Crisis Through an Accounting Lens

Dirk J Bezemer

Click to access MPRA_paper_15766.pdf


Bezemer, Dirk J.

“This is Not a Credit Crisis–It is a Debt Crisis.”

Economic Affairs 29.3 (2009): 95-97.


Godley, Wynne, and Marc Lavoie.

Monetary economics: an integrated approach to credit, money, income, production and wealth.

Springer, 2012.


Stock-flow Consistent Modeling through the Ages

Eugenio Caverzasi Antoine Godin

January 2013

Click to access 558f0a0108ae1e1f9bace43e.pdf


Fiscal Policy in a Stock-Flow Consistent (SFC) Model

Wynne Godley and Marc Lavoie

April 2007

Click to access wp_494.pdf


Copeland, Morris A.

“Social accounting for moneyflows.” 

The Accounting Review 24.3 (1949): 254-264.


Finance and economic breakdown: modeling Minsky’s “financial instability hypothesis”


Steeve Keen

Click to access Keen1995FinanceEconomicBreakdown_JPKE_OCRed.pdf


The Credit Crisis and Recession as a Paradigm Test

Dirk J. Bezemer

Click to access JEI_PARADIGM_PAPER.pdf


Keen, Steve.

“A monetary Minsky model of the Great Moderation and the Great Recession.”

Journal of Economic Behavior & Organization 86 (2013): 221-235.

Click to access JEBO_2672.pdf



“No One Saw This Coming”
Understanding Financial Crisis Through Accounting Models

Dirk J Bezemer


Click to access Study-Bezemer-No-one-saw-this-coming.pdf



Understanding financial crisis through accounting models

Dirk J. Bezemer

Click to access 00b4952ce88deab0d2000000.pdf


Can Disequilibrium Macroeconomic Models Be Used to Anticipate Financial Instability?

A Case Study

Dirk J. Bezemer

Click to access Can_Macro_Models_JEvoLEcon_1.pdf


A dynamic monetary multi-sectoral model of production

Steve Keen, University of Western Sydney

Click to access Keen2011DynamicMonetaryMultisectoralModel.pdf


Circuit Theory Extended: The Role of Speculation in Crises

Neil Lancastle


Debt cycles, instability and fiscal rules: a Godley-Minsky model

Yannis Dafermos


Click to access Dafermos%20(2015)%20Debt%20cycles%20instability%20and%20fiscal%20rules.pdf


The post-Keynesian economics of credit and debt

Marc Lavoie

Click to access inet2012lavoie_post-keynesianeconomics.pdf


Assessing the Contribution of Hyman Minsky’s Perspective to Our Understanding of Economic Instability

Hersh Shefrin


Click to access Shefrin%20Assessing%20Minsky%20Jan%2013%202013.pdf


Modeling Financial Instability

Steve Keen


Click to access Keen2014ModelingFinancialInstability.pdf



Post-Keynesian Stock-Flow Consistent Modeling: A Survey

Eugenio Caverzasi and Antoine Godin


Click to access february_2015_-_kbs_research_bulletin_pdf.pdf


Godley and Graziani: Stock-Flow-Consistent Monetary Circuits

Gennaro Zezza

April 2011


Click to access 65034-Zezza%20-%20Godley%20and%20Graziani.%20Stock-Flow-Consistent%20Monetary%20Circuits.pdf


Features of a realistic banking system within a post-Keynesian stock-flow consistent model

Marc Lavoie,

Wynne Godley,

December 2003


Click to access 1321739.pdf


Words to the Wise: Stock Flow Consistent Modeling of Financial Instability

Stephen Kinsella

November 2011

Click to access 6228912.pdf


The Minskyan System, Part III:
System Dynamics Modeling of a Stock Flow–Consistent Minskyan Model

Eric Tymoigne

June 2006

Click to access wp_455.pdf



Wynne Godley

May 2004


A foxy hedgehog: Wynne Godley and macroeconomic modelling

Lance Taylor


Click to access ramanan-20100615T083857-gsl2drg.pdf



Some Simple, Consistent Models of the Monetary Circuit

Gennaro Zezza,

May 2004


Click to access 9314338.pdf


Money and Macroeconomic Dynamics : Accounting System Dynamics Approach

Edition 2.0

Kaoru Yamaguchi Ph.D.


Click to access Macro%20Dynamics.pdf


Money Creation under Full-reserve Banking: A Stock-flow Consistent Model

Patrizio Lainà

October 2015

Click to access wp_851.pdf


Endogenous Feedback Perspective on Money in a Stock-Flow Consistent Model

Working Paper (May 5, 2016)

I. David Wheat

Click to access Wheat%20Endogenous%20Feedback%20Perspective%20on%20Money%20WP.pdf



Modeling the Economy as a Whole – Stock-Flow Models
Gennaro Zezza


Click to access memf2015-Chapter25-Gennaro.pdf






Click to access MVP%20ROPE%202014.pdf


Foundations of Balance Sheet Economics

From  A Balance Sheet Approach to Financial Crisis

Financial markets have become increasingly integrated over the past ten years. In many countries, foreign borrowing has helped to finance higher levels of investment than would be possible with domestic savings alone and contributed to sustained periods of growth. But the opening of capital markets has also placed exceptional demands on financial and macroeconomic policies in emerging market economies. Private capital flows are sensitive to market conditions, perceived policy weaknesses, and negative shocks. Flows of private capital have been more volatile than many expected. A number of major emerging economies have experienced sharp financial crises since 1994.

The financial structure of many emerging markets economies—the composition and size of the liabilities and assets on the country’s financial balance sheet—has been an important source of vulnerability to crises. Financial weaknesses, such as a high level of short-term debt, can be a trigger for domestic and external investors to reassess their willingness to finance a country. The composition of a country’s financial balance sheets also helps to determine how much time a country might have to overcome doubts about the strength of its macroeconomic policy framework, and, more generally, how effectively a country can insulate itself from volatility stemming from changes in global market conditions.

This paper seeks to lay out a systematic analytical framework for exploring how balance sheet weaknesses contribute to the origin and propagation of modern-day financial crises. It draws on the growing body of academic work that emphasizes the importance of balance sheets. It pays particular attention to the balance sheets of key sectors of the economy and explores how weaknesses in one sector can cascade and ultimately generate a broader crisis.

What Is the Balance Sheet Approach?

Unlike traditional analysis, which is based on the examination of flow variables (such as current account and fiscal balance), the balance sheet approach focuses on the examination of stock variables in a country’s sectoral balance sheets and its aggregate balance sheet (assets and liabilities). From this perspective, a financial crisis occurs when there is a plunge in demand for financial assets of one or more sectors: creditors may lose confidence in a country’s ability to earn foreign exchange to service the external debt, in the government’s ability to service its debt, in the banking system’s ability to meet deposit outflows, or in corporations’ ability to repay bank loans and other debt. An entire sector may be unable to attract new financing or roll over existing short-term liabilities. It must then either find the resources to pay off its debts or seek a restructuring. Ultimately, a plunge in demand for the country’s assets leads to a surge in demand for foreign assets and/or for assets denominated in foreign currency. Massive outflows of capital, a sharp depreciation of the exchange rate, a large current account surplus, and a deep recession that reduces domestic absorption are often the necessary counterpart to a sudden adjustment in investors’ willingness to hold a country’s accumulated stock of financial assets.

An economy’s resilience to a range of shocks, including financial shocks, hinges in part on the composition of the country’s stock of liabilities and assets. The country’s aggregate balance sheet—the external liabilities and liquid external assets of all sectors of the economy—is vital. But it is often equally important to look inside an economy and to examine the balance sheet of an economy’s key sectors, such as the government, the financial sector, and the corporate sector.

Our framework for assessing balance sheet risks focuses on four types of balance sheet mismatches, all of which help to determine a country’s ability to service debt in the face of shocks: (i) maturity mismatches, where a gap between liabilities due in the short term and liquid assets leaves a sector unable to honor its contractual commitments if the market declines to roll over debt, or creates exposure to the risk that interest rates will rise; (ii) currency mismatches, where a change in the exchange rate leads to a capital loss;
(iii) capital structure problems, where a heavy reliance on debt rather than equity financing leaves a firm or bank less able to weather revenue shocks; and (iv) solvency problems, where assets—including the present value of future revenue streams—are insufficient to cover liabilities, including contingent liabilities. Maturity mismatches, currency mismatches, and a poor capital structure all can contribute to solvency risk, but solvency risk can also arise from simply borrowing too much or from investing in low-yielding assets.

An analytical framework that examines the balance sheets of an economy’s major sectors for maturity, currency, and capital structure mismatches helps to highlight how balance sheet problems in one sector can spill over into other sectors, and eventually trigger an external balance of payments crisis. Indeed, one of the core arguments that emerges from this approach is that the debts among residents that create internal balance sheet mismatches also generate vulnerability to an external balance of payments crisis. The transmission mechanism often works through the domestic banking system. For instance, broad concerns about the government’s ability to service its debt, whether denominated in domestic or foreign currency, will quickly destabilize confidence in the banks holding this debt and may lead to a deposit run. Alternatively, a change in the exchange rate coupled with unhedged foreign exchange exposure in the corporate sector can undermine confidence in the banks that have lent to that sector. The run on the banking system can take the form of a withdrawal of cross-border lending by nonresident creditors, or the withdrawal of deposits by domestic residents.

Many of the characteristics of a capital account crisis derive from the adjustment in portfolios that follows from an initial shock. Underlying weaknesses in balance sheets can linger for years without triggering a crisis. For example, a currency mismatch can be masked so long as continued capital inflows support the exchange rate. Consequently, the exact timing of a crisis is difficult to predict. However, should a shock undermine confidence, it can trigger a large and disorderly adjustment, as the initial shock reveals additional weaknesses and a broad range of investors, including local residents, seek to reduce their exposure to the country. Massive flows are the necessary counterpart of a sudden move toward a new equilibrium of asset holdings stemming from rapid stock adjustments. If these flows cannot be financed out of reserves, the relative price of foreign and domestic assets has to adjust. An overshooting in asset prices (including the exchange rate) is likely, as investors rarely have access to perfect information and may be prone to herding.

Policy Implications

Information about sectoral balance sheets is most useful if it is available in time to allow policymakers to identify and correct weaknesses before they contribute to financial difficulties. In practice, however, balance sheet information is often only partly available and can be obtained only with significant time lags, which limits its utility for all but ex post analysis. Balance sheet analysis starts with in-depth analysis of sector vulnerabilities; the first step is to identify gaps in country data and to develop the sources needed to provide this data. There is an obvious case for better data collection and enhanced external disclosure of key balance sheet data.

The balance sheet approach also focuses attention on policies that can reduce sectoral vulnerabilities—particularly the vulnerability to changes in key financial variables. It reinforces the importance of (i) sound debt management by the public sector to minimize the risk that weaknesses in the public sector’s balance sheet will be a source of financial difficulty and to preserve the public sector’s capacity to cushion against shocks originating in the private sector; (ii) policies that create incentives for the private sector to limit its exposure to various balance sheet risks, particularly the explosive combination of currency and maturity risks created by short-term foreign currency denominated borrowing; and (iii) the need to maintain a sufficient cushion of reserves. Flexible exchanges rates can help to limit exposure to currency risk and encourage ongoing hedging as well as facilitating adjustment to external shocks. But the balance sheet approach also underscores some of the risks that can continue to arise in a floating exchange rate regime, particularly if the public sector is the source of the financial instruments that help the private sector hedge against currency risk. While the balance sheet approach directs attention to indicators of financial strength rather than more classic macroeconomic indicators, it in no way diminishes the importance of sound macroeconomic policies. Large debt stocks emerge from persistent flow imbalances (fiscal and current account deficits), and underlying macroeconomic weaknesses are often the reason why countries can borrow only in foreign currency or with short maturities.


There are five strands in development of Balance sheet Economics.

A) Work of Prof. K Tsujimura and Prof. Mizoshita and Prof. M Tsujimura on asset-liabilities Matrices (ALM).

B) IMF’s Balance sheet Approach (BSA)

C) Prof. N Zhang’s work on the Global Flow of Funds accounts

D) Post Keynesian Economists – Mark Lavoie, Dirk Bezemer, Wynne Godley, Hyman Minsky, Steve Keen

E) Money View – Perry Mehrling, Zoltan Pozsar




Key sources for Research:

Compilation and Application of Asset-Liability Matrices: A Flow-of-Funds Analysis of the Japanese Economy 1954-1999.
 Tsujimura, Kazusuke, and Masako Mizoshita.



Tsujimura, Masako, and Kazusuke Tsujimura.

“Balance sheet economics of the subprime mortgage crisis.”

Economic Systems Research 23.1 (2011): 1-25.

Click to access tsujimura_-_balance_sheet_economics_presentation.pdf



Civil Law, Quadruple Entry System and the Presentation Format of

National Accounts

Kazusuke Tsujimura Masako Tsujimura

July 20, 2008 ver.4.1 September 11, 2007 ver.1.1

Click to access DP109.pdf



Foundations of Balance Sheet Economics

Kazusuke Tsujimura and Masako Tsujimura


Click to access TsujimuraPaper.pdf



Asset-Liability-Matrix Analysis Derived from the Flow-of –Funds Accounts: the Bank of Japan’s Quantitative Monetary Policy Examined


Kazusuke Tsujimura

Masako Mizoshita


Click to access ALM.pdf



Compilation and Application of Asset-Liability Matrices:

A Flow-of-Funds Analysis of the Japanese Economy 1954-1999

Kazusuke Tsujimura Masako Mizoshita

November 3, 2004 ver.1.1 October 15, 2004 ver.1.0

Click to access fulltext.pdf



Tsujimura, Kazusuke, and Masako Mizoshita.

“Flow of Funds Analysis.”




Does Monetary Policy Work under Zero-Interest Rate?

Kazusuke Tsujimura Masako Mizoshita

October 2003 ver.1.0 January 2004 ver.1.2


Click to access fulltext.pdf



Tsujimura, Kazusuke, and Masako Mizoshita.

“How to Become a Big Player.”




Tsujimura, Kazusuke, and Masako Mizoshita.

“European Financial Integration.”




Mizoshita, Kazusuke Tsujimura Masako.

“Flow of Funds Analysis: BOJ Quantitative Monetary Policy Examined.”





Measuring Global Flow of Funds and Integrating Real and Financial Accounts: Concepts, Data Sources and Approaches

Nan Zhang (Stanford University)

Paper Prepared for the IARIW-OECD Special Conference


Click to access zhang.pdf



An Integrated Framework for Financial Positions and Flows on a From-Whom-to-Whom Basis: Concepts, Current Status, and Prospects1

Prepared by Manik Shrestha, Reimund Mink,2 and Segismundo Fassler



Click to access wp1257.pdf




Global-Flow-of-Funds Analysis in a Theoretical Model -What Happened in China’s External Flow of Funds 


Nan Zhang


Click to access 08GFOF.pdf



Simultaneous-Equations Model for Global-Flow-Funds Analysis

Nan Zhang

Click to access 2011_dublin_48_01_zhang.pdf



Global Flow of Funds: Mapping Bilateral Geographic Flows

Authors1: Luca Errico, Richard Walton, Alicia Hierro, Hanan AbuShanab, Goran Amidzic


Click to access STS083-P1-S.pdf




The Composition of The Global Flow of Funds in East Asia

Nan Zhang Hiroshima Shudo University




What Happened in China’s External Flow of Funds?

-Global-Flow-of-Funds Analysis in a Theoretical Model

Nan Zhang


Click to access zhang_nan.pdf



Quantitative Evaluation of Foreign Exchange Intervention and Sterilization in Japan ―A Flow-of-Funds Approach


Kazusuke Tsujimura

Masako Mizoshita

April 04, 2004 March 21, 2005

Click to access fulltext.pdf




Using the Balance Sheet Approach in Surveillance: Framework, Data Sources, and Data Availability
Johan Mathisen  Anthony J. Pellechio

April 2006



A Balance Sheet Approach to Financial Crisis

Mark Allen, Christoph Rosenberg, Christian Keller, Brad Setser, and Nouriel Roubini


Click to access wp02210.pdf



A New Framework for Analyzing and Managing Macrofinancial Risks of an Economy

Dale F. Gray, Robert C. Merton and Zvi Bodie

September 25, 2006

Click to access w12637.pdf



Contingent Claims Approach to Measuring and Managing Sovereign Credit Risk

Dale F. Gray, Robert C. Merton and Zvi Bodie

July 3, 2007


Click to access contingentclaimsapproachfinal7-3-07.pdf




Hofer, Andrea.

“The International Monetary Fund’s Balance Sheet Approach to Financial Crisis Prevention and Resolution.”



Analyzing the Israeli economy’s resilience to exchange rate risk

Yair Haim, Roee Levy

January 2007

Click to access dp0701e.pdf




Giovanni Cozzi and
Jan Toporowski

December 2006

Click to access wp_485.pdf



Debt-Related Vulnerabilities and Financial Crises An Application of the Balance Sheet Approach to Emerging Market Countries

Christoph Rosenberg, Ioannis Halikias, Brett House, Christian Keller, Jens Nystedt, Alexander Pitt, and Brad Setser


Click to access 070104.pdf



The Balance Sheet Approach and the Public Debt Stock Analysis: the Case of Lebanon

Souaid, Sana


Click to access 2011_dublin_111_05_souaid.pdf




Balance Sheet Analysis: A New Approach to Financial Stability


By Jean Christine A. Armas


Click to access EN16-01.pdf



Balance-Sheets: A Financial/Liability Approach

A Concise Macro-Financial Framework: SNA Theory and Concepts Rapid Estimates of Market Valued Non-Financial Assets and National Wealth

Bo Bergman

Click to access bergman_paper.pdf



Macro Financial Balance Sheets. Alternative Approach. 1980 – 2011. Sweden

Bo Bergman


Click to access Bergmanpaper.pdf





June 2015

Click to access 061215.pdf






July 2015

Click to access 071315.pdf



Sectoral interlinkages in balance sheet approach

28-29 August 2012

Ryoichi Okuma

Click to access okuma.pdf



Growing fragilities? Balance sheets in The Great Moderation

Richard Barwell and Oliver Burrows


Click to access fs_paper10.pdf



Balance Sheets. A financial approach

Bo Bergman


Click to access poster1Bergman.pdf



A Closer Look at Sectoral Financial Linkages in Brazil I: Corporations’ Financial Statements

Prepared by Izabela Karpowicz, Fabian Lipinsky and Jongho Park

March 2016

Click to access wp1645.pdf





Click to access 073014.pdf



The IMF’s ‘Surveillance’: How Has It Changed since the Global Financial Crisis?

Emily Poole


Click to access bu-0315-9.pdf




Mapping the Shadow Banking System through a Global Flow of Funds Analysis


Hanan AbuShanab Goran Amidzic Luca Errico Artak Harutyunyan Yevgeniya Korniyenko Elena Loukoianova Hyun Song Shin Richard Walton


First IMF Statistical Forum Washington DC, November 12-13, 2013


Click to access Hyun-Song-Shin2.pdf

Contagion in Financial (Balance sheets) Networks


From Contagion Risk in Financial Networks


A notable feature of the modern Financial world is its high degree of interdependence. Banks and other Financial institutions are linked in a variety of ways. The mutual exposures that Financial institutions adopt towards each other connect the banking system in a network. Despite their obvious benefit, the linkages come at the cost that shocks, which initially affect only a few institutions, can propagate through the entire system. Since these linkages carry the risk of contagion, an interesting question is whether the degree of interdependence in the banking system sustains systemic stability.

From Contagion Risk in Financial Networks

Recently, there has been a substantial interest in looking for evidence of contagious failures of Financial institutions resulting from the mutual claims they have on one another. Most of these papers use balance sheet information to estimate bilateral credit relationships for different banking systems. Subsequently, the stability of the interbank market is tested by simulating the breakdown of a single bank.


From  Contagion in Financial Networks (PG and SK)


In modern financial systems, an intricate web of claims and obligations links the balance sheets of a wide variety of intermediaries, such as banks and hedge funds, into a network structure. The recent advent of sophisticated financial products, such as credit default swaps and collateralised debt obligations, has heightened the complexity of these balance sheet connections still further, making it extremely di¢ cult for policymakers to assess the potential for contagion associated with the failure of an individual financial institution or from an aggregate shock to the system as a whole.

The interdependent nature of financial balance sheets also creates an environment for feedback elements to generate amplified responses to any shock to the financial system.


From Contagion in Financial Networks (PG and SK)


The interactions between financial intermediaries following shocks make for non-linear system dynamics, and our model provides a framework for isolating the probability and spread of contagion when claims and obligations are interlinked. We find that financial systems exhibit a robust-yet-fragile tendency. While greater connectivity reduces the likelihood of widespread default, the impact on the financial system, should problems occur, could be on a significantly larger scale than hitherto. The model also highlights how a priori indistinguishable shocks can have very different consequences for the financial system. The resilience of the network to large shocks in the past is no guide to future contagion, particularly if shocks hit the network at particular pressure points associated with underlying structural vulnerabilities.

From Contagion in Financial Networks (PG and SK)

The intuition underpinning these results is straightforward. In a more connected system, the counterparty losses of a failing institution can be more widely dispersed to, and absorbed by, other entities. So increased connectivity and risk sharing may lower the probability of contagion. But conditional on the failure of one institution triggering contagious defaults, a higher number of Financial linkages also increases the potential for contagion to spread more widely. In particular, greater connectivity increases the chances that institutions which survive the effects of the initial default will be exposed to more than one defaulting counterparty after the first round of contagion, thus making them vulnerable to a second-round default. The impact of any crisis that does occur could, therefore, be larger.



Key Sources of Research:


Credit Chains

Kiyotaki and Moore


Click to access creditchains.pdf


Credit Chains and Sectoral Comovement: Does the Use of Trade Credit Amplify Sectoral Shocks?

Claudio Raddatz


Click to access Credit_chains_20090512_Complete.pdf


A flow network analysis of direct balance-sheet contagion in financial networks

Mario Eboli

Click to access 1862_KWP.pdf


Contagion in Financial Networks

Paul Glasserman H. Peyton Young


October 20, 2015

Click to access Contagion%20in%20Financial%20Networks.pdf


Contagion in Financial Networks

Prasanna Gai and Sujit Kapadia

March 2007


Click to access prasanna_gai_-_contagioninfinancialnetworks.pdf


The Effect of the Interbank Network Structure on Contagion and Financial Stability

Co-Pierre Georg

Click to access 2011_VISemRiscosBCB_10h40_CoPierreGeorg.pdf


Contagion Risk in Financial Networks

Ana Babus

February 2007

Click to access s1p2-babus.pdf


Financial Fragility and Contagion in Interbank Networks

Stefano Pegoraro

Click to access Stefano%20Pegoraro.pdf


Complexity, concentration and contagion

Prasanna Gai , Andrew Haldane , Sujit Kapadia

Click to access ComplexityConcentrationContagion.JME.GaiHaldaneKapdia2011.pdf


Contagion in financial networks : a threat index

Gabrielle Demange∗

May 23, 2011


Click to access gdemange_1105.pdf


Liquidity and financial contagion




Click to access etud1_0208.pdf


Financial globalization, financial crises and contagion

$ Enrique G. Mendoza Vincenzo Quadrini

Click to access JME2010.pdf


The International Finance Multiplier

Paul Krugman

October 2008


How Likely is Contagion in Financial Networks?

Paul Glasserman,1 and H. Peyton Young


Click to access OFRwp0009_GlassermanYoung_HowLikelyContagionFinancialNetworks.pdf


Capital and Contagion in Financial Networks

S. Battiston  G. di Iasio  L. Infante F. Pierobon

Click to access 7ifcconf_infante.pdf


Contagion in the Interbank Network: an Epidemiological Approach

Mervi Toivanen


Click to access 172550.pdf


Complex Financial Networks and Systemic Risk: A Review

Spiros Bougheas and Alan Kirman


Click to access cfcm-2014-04.pdf


Systemic Risk, Contagion, and Financial Networks: a Survey

Matteo Chinazzi∗ Giorgio Fagiolo†

June 4, 2015

Click to access 2013-08.pdf


Systemic Risk and Stability in Financial Networks†

By Daron Acemoglu, Asuman Ozdaglar, and Alireza Tahbaz-Salehi



Financial Contagion in Networks

Antonio Cabrales Douglas Gale


Piero Gottardi

Click to access Survey%20Oxford%20Cabrales%20Gale%20Gottardi050315-3.pdf


The Formation of Financial Networks

Ana Babus

Click to access formnet.pdf


Financial Networks and Contagion

By Matthew Elliott, Benjamin Golub, and Matthew O. Jackson

Click to access financial_networks.pdf


Chapter 21: Networks in Finance

Franklin Allen

Ana Babus

Click to access Allen%20and%20Babus%20-%20aug%2020-08-Long-SSRN.pdf


Interconnectedness: Building Bridges between Research and Policy

May 8-9, 2014


Size and complexity in model financial systems

Nimalan Arinaminpathya,1, Sujit Kapadiab, and Robert M. May


Click to access 18338.full.pdf


Financial system: shock absorber or amplifier?

by Franklin Allen and Elena Carletti

Click to access work257.pdf


Transmission Channels of Systemic Risk and Contagion in the European Financial Network

Nikos Paltalidis†, Dimitrios Gounopoulos, Renatas Kizys, Yiannis Koutelidakis

Click to access Transmission_Channels_of_Systemic_Risk_and_Contagion_in_the_European_Financial_Network_FINAL_150215.pdf


Systemic risk, contagion and financial networks


Contagion in Banking Networks: The Role of Uncertainty

Stojan Davidovic
Mirta Galesic
Konstantinos Katsikopoulos Amit Kothiyal
Nimalan Arinaminpathy


Click to access 16-02-003.pdf


Financial Contagion

F Allen and D Gale


Click to access contagion.pdf


Liquidity Risk and Contagion

Rodrigo Cifuentes Gianluigi Ferrucci

Hyun Song Shin


Click to access rtf04shin.pdf


Information Contagion and Bank Herding

Viral V. Acharya
Tanju Yorulmazer


Click to access acharya_yorulmazer.pdf



Franklin Allen Ana Babus Elena Carletti

Click to access w16177.pdf


Credit Cycles

Nobuhiro Kiyotaki

John Moore


Click to access km.pdf


Rethinking the financial network

Speech by Mr Andrew G Haldane,

28 April 2009.


Click to access r090505e.pdf


Liaisons dangereuses: Increasing connectivity, risk sharing, and systemic risk

Stefano Battiston Domenico Delli Gatti   Mauro Gallegati , Bruce Greenwald , Joseph E. Stiglitz


Click to access 1-s2.0-S0165188912000899-main.pdf



Risk and Liquidity in a System Context

Hyun Song Shin


Click to access 0518-hshin_riskliquid0.pdf



Francis A. Longstaff


Click to access subprime.pdf


Balance-Sheet Contagion

Nobuhiro Kiyotaki and John Moore

American Economic Review, 2002, vol. 92, issue 2, pages 46-50


Systemic Risk, Interbank Relations and Liquidity Provision by the Central Bank


Xavier Freixas, Bruno Parigi and Jean-Charles Rochet


Click to access sr047_tcm46-146825.pdf


Systemic risk in financial systems

Eisenberg, L., Noe, T., 2001.


Click to access EiseNoe01.pdf


Systemic Risk and the Financial System

NAS-FRBNY Conference on New Directions in Understanding Systemic Risk


Click to access 0518-background.pdf


Intermediation and Voluntary Exposure to Counterparty Risk 

Maryam Farboodi

Click to access MaryamFarboodiJMP.pdf


Liquidity Sharing and Financial Contagion

John Nash

September 28, 2015

Click to access Nash%20Liquidity%20Sharing.pdf


Pathways towards instability in financial networks


Marco Bardoscia,1 Stefano Battiston,2 Fabio Caccioli,3, 4 and Guido Caldarelli

Click to access 1602.05883v1.pdf


DebtRank: Too Central to Fail? Financial Networks, the FED and Systemic Risk

Stefano Battiston, Michelangelo Pulig, Rahul Kaushik, Paolo Tasca & Guido Caldarelli


Click to access srep00541.pdf


Risk and Global Economic Architecture: Why Full Financial Integration May Be Undesirable

By Joseph E. Stiglitz

Click to access 2010_Risk_and_Global_Economic.pdf


Network Valuation in Financial Systems

Paolo Barucca  Marco Bardoscia Fabio Caccioli, Marco D’Errico1, Gabriele Visentin, Stefano Battiston, and Guido Caldarelli

Click to access 1606.05164.pdf


The Price of Complexity in Financial Network

Stefano Battiston, Guido Caldarelli, Robert M. May

Tarik Roukny and Joseph E. Stiglitz

November, 2015


Default Cascades in Complex Networks: Topology and Systemic Risk

Tarik Roukny Hugues Bersini1, Hugues Pirotte Guido Caldarelli & Stefano Battiston


Click to access srep02759.pdf


Network Structure and Systemic Risk in Banking Systems

Rama Cont Amal Moussa Edson Bastos e Santos

December 1, 2010



Systemic Risk and Network Formation in the Interbank Market

Ethan Cohen-Cole  Eleonora Patacchini Yves Zenou

January 10, 2012

Click to access Cohen_Patacchini_Zenou_22.pdf


A Network Analysis of the Evolution of the German Interbank Market 

Tarik Roukny† Co-Pierre Georg‡  Stefano Battiston

Click to access working_paper_461.pdf


DebtRank: A microscopic foundation for shock propagation

Marco Bardoscia1, Stefano Battiston, Fabio Caccioli, and Guido Caldarelli

Click to access 1504.01857.pdf


Balance Sheet Network Analysis of Too-Connected-to-Fail Risk in Global and Domestic Banking Systems

Jorge A. Chan-Lau

Click to access 00b7d529e09499414f000000.pdf


Network models and financial stability

Erlend Nier, Jing Yang, Tanju Yorulmazer and Amadeo Alentorn

April 2008

Click to access Nieretal09.pdf


Systemic risk in banking ecosystems


Andrew G. Haldane & Robert M. May

Click to access 02e7e522449ef4d3b0000000.pdf


Resilience to contagion in financial networks

Hamed Amini∗ Rama Cont† Andreea Minca‡

Click to access 1112.5687.pdf


‘Too Interconnected To Fail’ Financial Network of US CDS Market: Topological Fragility and Systemic Risk

Sheri Markose1a, Simone Giansanteb, Ali Rais Shaghaghic


Click to access Giansante_JEBO_2012_i.pdf


Taking Uncertainty Seriously: Simplicity versus Complexity in Financial Regulation

David Aikman and Mirta Galesic and Gerd Gigerenzer and Sujit Kapadia and Konstantinos Katsikopolous and Amit Kothiyal and Emma Murphy and Tobias Neumann



Click to access MPRA_paper_59908.pdf


Financial Contagion in Networks

Antonio Cabrales, Douglas Gale and Piero Gottardi


Systemic illiquidity in the interbank network

Gerardo Ferrara, Sam Langfield, Zijun Liu and Tomohiro Ota

April 2016

Click to access swp586.pdf


Interconnectedness and Systemic Risk: Lessons from the Financial Crisis and Policy Implications

Remarks by
Janet L. Yellen


Click to access Yellen20130104a.pdf



Hyun Song Shin

Click to access securitisation.pdf


Crisis Transmission in the Global Banking Network



Click to access wp1691.pdf


Liquidity risk, cash-flow constraints and systemic feedbacks

Sujit Kapadia, Mathias Drehmann, John Elliott and Gabriel Sterne


Click to access wp456.pdf


Systemic Financial Feedbacks – Conceptual Framework and Modeling Implications

Dieter Gramlich and Mikhail V. Oet


Click to access P1364.pdf


Feedback Mechanisms in the Financial System: A Modern View

Mikhail V. Oet Oleg V. Pavlov

Click to access P1441.pdf




Interdependence in Payment and Settlement Systems


From The Payment System

The payment system – which includes financial market infrastructure for payments, securities and derivatives – is a core component of the financial system, alongside markets and institutions. If modern economies are to function smoothly, economic agents have to be able to conduct transactions safely and efficiently. Payment, clearing and settlement arrangements are of fundamental importance for the functioning of the financial system and the conduct of transactions between economic agents in the wider economy. Private individuals, merchants and firms need to have effective and convenient means of making and receiving payments. Moreover, funds, securities and other financial instruments are traded in markets, providing a source of funding and allowing households, firms and other economic actors to invest surplus funds or savings in order to earn a return on their holdings. Active markets facilitate price discovery, the efficient allocation of capital and the sharing of risk between economic actors.

Public trust in payment instruments and systems is vital if they are to effectively support transactions. In financial markets, market liquidity is critically dependent on confidence in the safety and reliability of clearing and settlement arrangements for funds and financial instruments. If they are not managed properly, the legal, financial and operational risks inherent in payment, clearing and settlement activities have the potential to cause major disruption in the financial system and the wider economy.

Banks and other financial institutions are the primary providers of payment and financial services to end users, as well as being major participants in financial markets and important owners and users of systems for the processing, clearing and settlement of funds and financial instruments. The central bank, as the issuer of the currency, the monetary authority and the “bank of banks”, has a key role to play in the payment system and possesses unique responsibilities. It is therefore no coincidence that one of the basic tasks of the ESCB and the ECB is to promote the smooth operation of payment systems. A safe and efficient payment system is of fundamental importance for economic and financial activities and is essential for the conduct of monetary policy and the maintenance of financial stability.


From The Payment System


The complexity and – in particular – importance of market infrastructure for the handling of payments and financial instruments has increased greatly in recent decades, owing not only to the tremendous increases observed in the volume and value of financial transactions, but also to the wealth of financial innovation and the advances seen in information and communication technologies. Bilateral barter trade is now largely a thing of the past, and instead economic agents buy and sell goods and services (including financial instruments) in markets, making use of the transfer services made available by market infrastructure.

Payment, clearing and settlement systems may differ from country to country in terms of their type and structure, both for historical reasons and on account of differences between countries’ legal, regulatory and institutional environments. Furthermore, rather than being static, payment, clearing and settlement systems and arrangements are dynamic constructions which have evolved over time and will continue to do so in the future. A key priority for central banks is to contribute to the development of modern, robust and efficient market infrastructure which serves the needs of their economies and facilitates the development of safe and efficient financial markets.

All transactions are exposed to a variety of risks, and this is particularly true for financial transactions. Thus, in order to facilitate enhanced risk management, many countries have introduced real-time gross settlement systems for the handling of critical payments. Progress has been made in the implementation of safer and more efficient systems and procedures for the clearing and settlement of securities. Modern securities settlement systems offer delivery-versus-payment mechanisms and allow the effective management of collateral, while foreign exchange transactions are increasingly being settled on a payment-versus-payment basis. In parallel, stronger international trade links, the increased integration of international financial markets (including global derivatives markets) and large migrant flows have all contributed to increased demand for arrangements allowing the cross-border handling of wholesale and retail transactions, raising new issues from a policy and risk perspective.

From The interdependencies of payment and settlement systems

The global payment and settlement infrastructure has changed significantly over the last decade. The myriad of domestic and cross-border systems that make up the global infrastructure are increasingly interconnected through a web of direct and indirect relationships. Through these relationships, the smooth functioning of a single system often becomes contingent on the performance of one or more other systems. In addition, individual systems are often reliant on common third parties, financial markets or other factors. Consequently, the settlement flows, operational processes and even risk management procedures of individual systems are often materially interdependent with those of other systems. As a result, the numerous systems that make up the global clearing and settlement infrastructure have become more tightly interdependent.

This increasing interdependence is driven by several interrelated factors, including technological innovations, globalisation and financial sector consolidation. In addition, a number of initiatives by the financial industry and by public authorities to reduce the costs and risks of settlement have purposely promoted greater integration among the numerous components of the global payment and settlement infrastructure. For example, the 1989 G30 recommendations for T+3 securities settlement, central bank policies encouraging the development and reliance on systems with intraday finality, and the CPSS focus on reducing foreign exchange settlement risk have provided incentives for more straight through processing and tighter relationships among individual systems.3 While these explicit initiatives explain one aspect of tightening interdependencies, institutions’ profit-seeking and cost management incentives also foster interdependencies.

Interdependencies have important implications for the safety and efficiency of the global payment and settlement infrastructure. Some forms of interdependencies have facilitated significant improvements in the safety and efficiency of payment and settlement processes. At the same time, interdependencies increase the potential for a given disruption to spread quickly to many different systems. This potential was noted in the 2000 G10 report on Financial sector consolidation (the Ferguson report), which suggested that interdependencies might accentuate the role of payment and settlement systems in the transmission of disruptions across the financial system, and is further analysed in this report.

The potential for interdependencies to reduce key sources of risk, and yet create new sources of risk, highlights the numerous trade-offs faced by payment and settlement systems, their participants and public authorities. The reduction of one form of risk often comes at the expense of increasing another source of risk, or of increasing costs.

From Congestion and Cascades in Interdependent Payment Systems


The report identifies three different types of interdependencies. System-based interdependency, which includes payment versus payment (PvP) or delivery versus payment arrangements (DvP)4 as well as liquidity bridges between systems. Institution-based interdependence which arises when, for example, a single institution participates in, or provides settlement services to, several systems. The third type is environmental-based interdependency which can emerge if multiple systems depend on a common service provider, for example the messaging service provider SWIFT.


From Illiquidity in the Interbank Payment System following Wide-Scale Disruptions


At the apex of the U.S. financial system are a number of critical financial markets that provide the means for both domestic and international financial institutions to allocate capital and manage their exposures to liquidity, market, credit and other types of risks. These markets include Federal funds, foreign exchange, commercial paper, government and agency securities, corporate debt, equity securities and derivatives. Critical to the smooth functioning of these markets are a set of wholesale payments systems and financial infrastructures that facilitate clearing and settlement.1 Operational difficulties of these entities or their participants can create difficulties for other systems, infrastructures and participants. Such spill overs might cause liquidity shortages or credit problems and hence potentially impair the functioning and stability of the entire financial system.


Key Sources of Research:


The interdependencies of payment and settlement systems



Click to access d84.pdf


The Payment System



Click to access paymentsystem201009en.pdf


Interdependencies of payment and settlement systems: the Hong Kong experience


MARCH 2009

Click to access fa2_print.pdf


Congestion and Cascades in Interdependent Payment Systems


Fabien Renault, Walter E. Beyeler,  Robert J. Glass, Kimmo Soramäki,  Morten L. Bech

March 16, 2009


Click to access CongestionAndCascadesInCoupledPaymentSystems3_30_09_SAND2009-2175J.pdf


Eurozone payment and securities settlement systems interdependence:

Will consolidation initiatives lead to contagion; who is accountable?

February 2004

Click to access policy_paper_full_120204.pdf


Recent developments in intraday liquidity in payment and settlement systems


Payment systems and Market Infrastructure Directorate


Click to access etud15_0208.pdf


Precautionary Demand and Liquidity in Payment Systems

Gara M. Afonso and Hyun Song Shin

August 2010


Click to access sr352.pdf


Banque de France – European Central Bank: Liquidity in interdependent transfer systems



Interlinkages between Payment and Securities Settlement Systems

David C. Mills, Jr.y Samia Y. Husain

September 4, 2009

Click to access 2-Mills-Husain.pdf


Risk and Concentration in Payment and Securities Settlement Systems


David C. Mills, Jr. and Travis D. Nesmith 2007-62


Click to access 200762pap.pdf


Simulation studies of liquidity needs, risks and efficiency in payment networks

Proceedings from the Bank of Finland Payment and Settlement System Seminars 2005–2006

Harry Leinonen (ed.)

Click to access BoF_2007_Proceedings.pdf


Managing Operational Risk in Payment, Clearing, and Settlement Systems

Kim McPhail


Click to access wp03-2.pdf


Liquidity, risks and speed in payment and settlement systems – a simulation approach


Harry Leinonen (ed.)


Click to access 118263.pdf





Click to access FSAP_Technical%20Note_Payment%20Systems_Liquidity%20Risk%20Management_Final_5%2011%2010.pdf


The role of time-critical liquidity in financial markets

David Marshall and Robert Steigerwald



Illiquidity in the Interbank Payment System following Wide-Scale Disruptions

Morten L. Bech Rod Garratt


Click to access sr239.pdf


Progress in reducing foreign exchange settlement risk

Committee on Payment and Settlement Systems

May 2008

Click to access d83.pdf


Financial market utilities and the challenge of just-in-time liquidity

by Richard Heckinger, David Marshall, and Robert Steigerwald


Click to access pdp2009-4-pdf.pdf


Diagnostics for the financial markets – computational studies of payment system

Simulator Seminar Proceedings 2009–2011


Click to access E45_Chapter_11.pdf


Congestion and Cascades in Coupled Payment Systems

Fabien Renault, Walter E. Beyeler, Robert J. Glass, Kimmo Soramäki and Morten L. Bech

October 31, 2007







Evolution of Banks Complexity

Rise of complexity in Banks since 1980s has been remarkable.

Increase in

  • Assets
  • Connections
  • Number of Subsidiaries
  • Income Mix
  • Funding sources
  • Intermediation chains
  • Securitization (exotic structured financial products)
  • global reach

From  Bank Size and Systemic Risk

Large banks have grown significantly in size and become more involved in market-based activities (those outside traditional bank lending) since the late 1990s. The advance of information technology and deregulation, which has led to a proliferation of financial markets, may have been the key driver of this process.

Large banks tend to have lower capital, less-stable funding, more market-based activities, and be more organizationally complex than small banks. This suggests that large banks may have a distinct, possibly more fragile, business model.

Large banks are riskier, and create more systemic risk, when they have lower capital and less-stable funding. Large banks create more systemic risk (but are not individually riskier) when they engage more in market-based activities or are more organizationally complex.

Failures of large banks tend to be more disruptive to the financial system than failures of small banks. The failures of large banks generate liquidity stress in the banking system, their activities that rely on economies of scale and scope cannot easily be replaced by small banks, and the marginal cost of taxpayer support may increase in the volume required.

Traditional bank regulation, which focuses on individual bank risk, may be insufficient for large banks. Additional regulation, based on systemic risk considerations, is needed to deal with the externalities of distress of large banks. This may include capital surcharges on large banks and measures to reduce their involvement in market-based activities and their organizational complexity.

Banks may operate at a size that is too large from a social welfare perspective due to “too- big-to-fail” subsidies and corporate governance shortcomings. However, the potential for economies of scale in large banks cannot be dismissed. As a result, “optimal” bank size is uncertain.


Key Sources of Research:

5-Bank Asset Concentration for United States


Return on Average Assets for all U.S. Banks


Return on Average Equity for all U.S. Banks


Evolution in Bank Complexity

Nicola Cetorelli, James McAndrews, and James Traina


Click to access 1412cet2.pdf


Measures of Global Bank Complexity

Nicola Cetorelli and Linda S. Goldberg

Click to access 1412ceto.pdf


Organizational Complexity and Balance Sheet Management in Global Banks

Nicola Cetorelli, Linda S. Goldberg

Issued in April 2016


Same Name, New Businesses: Evolution in the Bank Holding Company

Nicola Cetorelli and Samuel Stern


Cross-Border Banking Flows and Organizational Complexity in Financial Conglomerates

Linda S. Goldberg

January 27 2016


A Structural View of U.S. Bank Holding Companies

Dafna Avraham, Patricia Selvaggi, and James Vickery

Click to access 1207avra.pdf


Consolidation in the U.S. Banking Industry: Is the “Long, Strange Trip” About to End?


Kenneth D. Jones and Tim Critchfield


Click to access article2.pdf



Jacopo Carmassi & Richard J. Herring



Click to access 15-10.pdf


U.S. Banks’ Changing Footprint at Home and Abroad

Linda Goldberg and Rose Wang



Federal Reserve Bank of New York Economic Policy Review

December 2014 Volume 20 Number 2

Special Issue: Large and Complex Banks


Click to access EPRvol20no2.pdf


In-Depth: The Big Banks: Too Complex To Manage?



Too Big To Fail:The Pros and Cons of Breaking Up Big Banks

David C. Wheelock



Click to access Too_Big_To_Fail.pdf


Systemically Important or “Too Big to Fail” Financial Institutions


Marc Labonte

June 30, 2015


Click to access R42150.pdf


Bank Size and Systemic Risk

Luc Laeven, Lev Ratnovski, and Hui Tong



The Evolution of Banks and Financial Intermediation: Framing the Analysis


Nicola Cetorelli, Benjamin H. Mandel, and Lindsay Mollineaux


Click to access 1207cet1.pdf



Evolution and Heterogeneity among Larger Bank Holding Companies: 1994 to 2010


Adam Copeland


Click to access 1207cope.pdf


The Role of Banks in Asset Securitization

Nicola Cetorelli and Stavros Peristiani


Click to access 1207peri.pdf


Federal Reserve Bank of New York Economic Policy Review

July 2012
Volume 18 Number 2

Special Issue: The Evolution of Banks and Financial Intermediation


Click to access EPRvol18n2.pdf

Economics of Broker-Dealer Banks


From  Matching Collateral Supply and Financing Demands in Dealer Banks

Broker-dealers are firms that participate in markets by buying and selling securities on behalf of themselves and their clients. They must register with the Securities and Exchange Commission (SEC), and are often a subsidiary of a larger bank holding company. Any securities purchased by the firm for its account can be sold to clients or other firms, or can become part of the firm’s own holdings. Our definition of dealer banks includes activities performed by broker-dealers, but also includes OTC derivative dealing activities, which are often conducted in the affiliated depository institution subsidiary of the parent holding company (rather than the broker-dealer subsidiary).

From Matching Collateral Supply and Financing Demands in Dealer Banks


Dealer banks are active in the intermediation of many markets, either in their role as dealers or in their role as prime brokers where they provide financing to investors. Dealer banks are financial intermediaries that make markets for many securi- ties and derivatives by matching buyers and sellers, holding inventories, and buying and selling for their own account when buyers and sellers approach the dealer at different times, for different quantities, or are clustered on one side of the market. Many banks with securities dealer businesses also act in the primary market for securities as investment banks, underwrit- ing issues to sell later to investors. Services typically provided by dealers include buying and selling the same security simul- taneously, extending credit and lending securities in con- nection with transactions in securities, and offering account services associated with both cash and securities.


From Matching Collateral Supply and Financing Demands in Dealer Banks

Many dealers carry out their activities in a broker-dealer subsidiary of a bank holding company. For most derivatives trades, dealers are one of the two counterparties, with many dealers recording their derivative exposures at their affiliated bank, the depository institution subsidiary of the parent com- pany. Prime brokers are the financing arm of the broker-dealer, offering advisory, clearing, custody, and secured financing services to their clients, which are often large active investors, especially hedge funds. Prime brokers can conduct a variety of transactions for their customers, including derivatives trading, cash management, margin lending, and other types of financ- ing transactions.

From  Broker-Dealer Finance and Financial Stability

Broker-dealers were at the epicenter of the financial crisis. Their reliance on collateralized borrowing in the form of repurchase agreements was assumed to insulate them from runs, perhaps because many viewed collateralized lending as providing little default risk. This proved wrong. Many of their creditors did not want to take possession of the collateral backing the repurchase agreements in the event of default of a broker-dealer. As a result, there were widespread runs on broker-dealers, particularly those experiencing acute financial problems.  This was not, however, just a problem for broker-dealers. Because of broker-dealers’ crucial role as market-makers, liquidity in markets was severely impaired.

Importantly, these broker-dealers fund their holdings in uninsured short-term credit markets, which makes them inherently more subject to runs than institutions that finance their holdings with longer-term or insured borrowing. As the crisis showed, when investors lose confidence in broker-dealers, short-term funding “runs” from them, and as a consequence the broker-dealers lose their ability to effectively serve as middlemen in markets, which in turn can impair the ability of investors to buy or sell a wide variety of stocks and bonds.


Perhaps the defining event of the 2008 financial crisis was the failure of Lehman Brothers, one of the largest broker-dealers in the United States. However, the collapse of Lehman was not an isolated failure of a single broker-dealer – but rather one of a string of crises for multiple broker-dealers. Bear Stearns had failed earlier that year, Merrill Lynch experienced significant funding difficulties and was eventually acquired, and Goldman Sachs and Morgan Stanley opted to become bank holding companies. Foreign broker-dealers did not fare much better: several large foreign broker-dealers operating in the United States experienced very substantial losses that required a significant rebuilding of capital.

While there have been significant reductions in some broker-dealers’ holdings of highly risky assets, and some improvements in capital and liquidity positions (and collateral quality), their reliance on a wholesale funding model that is subject to runs remains surprisingly unchanged.



Key Sources of Research:

Failure mechanics of Dealer Banks



Matching Collateral Supply and Financing Demands in Dealer Banks


Adam Kirk, James McAndrews, Parinitha Sastry, and Phillip Weed


Click to access 1412kirk.pdf


How does failure spread across broker-dealers and dealer banks?

Jefferson Duarte and Adam Kolasinski

November 26, 2014


Click to access How_Does_Failure_Spread_Across_Jefferson_Duarte.pdf


Repo Runs

Antoine Martin, David Skeie, and Ernst-Ludwig von Thadden

May 2010

Click to access 635888602.pdf


Financial intermediaries, Financial Stability and Monetary policy

Tobias Adrian and Hyun Song Shin


Click to access shin031209.pdf


Financial Intermediaries and Monetary Economics

Tobias Adrian Hyun Song Shin


Click to access sr398.pdf


The Changing Nature of Financial Intermediation and the Financial Crisis of 2007-09

Tobias Adrian and Hyun Song Shin

April 2010

Click to access sr439.pdf


Dealer Financial Conditions and Lender-of-Last-Resort Facilities

Viral V. Acharya, Michael J. Fleming, Warren B. Hrung, Asani Sarkar,

September 2015


Click to access Dealer%20Financial%20Conditions%20Sep_7_2015_with_tables_appendix.pdf


The Federal Reserve’s Primary Dealer Credit Facility

Tobias Adrian, Christopher R. Burke, and James J. McAndrews


Click to access ci15-4.pdf



The Federal Reserve’s Commercial Paper Funding Facility


Tobias Adrian, Karin Kimbrough, and Dina Marchioni

Click to access 1105adri.pdf


Repo and Securities Lending

Tobias Adrian

Brian Begalle Adam Copeland Antoine Martin

February 2013

Click to access sr529.pdf


Mapping and Sizing the U.S. Repo Market

Adam Copeland, Isaac Davis,Eric LeSueur, and Antoine Martin


Key Mechanics of the U.S. Tri-Party Repo Market

Adam Copeland, Darrell Duffie, Antoine Martin, and Susan McLaughlin


Click to access 1210cope.pdf


The Tri-Party Repo Market before the 2010 Reforms

Adam Copeland Antoine Martin Michael Walker


Click to access sr477.pdf


The Evolution of a Financial Crisis: Panic in the Asset-Backed Commercial Paper Market


Daniel M. Covitz, Nellie Liang, and Gustavo A. Suarez


Click to access 200936pap.pdf


Matching Prime Brokers and Hedge Funds

Egemen Eren


Click to access eren_jmp.pdf


Haircuts and Repo Chains

Tri Vi Dang

Gary Gorton

Bengt Holmström

Click to access Paper_Repo.pdf


Reference Guide to U.S. Repo and Securities Lending Markets

Viktoria Baklanova, Adam Copeland, and Rebecca McCaughrin

December 2015

Click to access sr740.pdf


Systemic risk in the repo market.


Alexander Shkolnik


Click to access fmws1_12590.pdf