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The Failure Mechanics of Dealer Banks

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  • Darrell, Duffie

    (Stanford University)

Abstract

I explain the key failure mechanics of large dealer banks, and some policy implications. This is not a review of the financial crisis of 2007—2009. Systemic risk is considered only in passing. Both the financial crisis and the systemic importance of large dealer banks are nevertheless obvious and important motivations.

Suggested Citation

  • Darrell, Duffie, 2010. "The Failure Mechanics of Dealer Banks," Economic Policy, Russian Presidential Academy of National Economy and Public Administration, vol. 4, pages 131-153.
    • Handle: RePEc:rnp:ecopol:1042
    as

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    References listed on IDEAS

    as
    1. Peter Hördahl & Michael R King, 2008. "Developments in repo markets during the financial turmoil," BIS Quarterly Review, Bank for International Settlements, December.
    2. Peter A. Abken & Ellis W. Tallman & Larry D. Wall, 1996. "The impact of a dealer's failure on OTC derivatives market liquidity during volatile periods," FRB Atlanta Working Paper 96-6, Federal Reserve Bank of Atlanta.
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    More about this item

    Keywords

    large dealer banks; failure; derivatives; flight of the creditors;
    All these keywords.

    JEL classification:

    • G01 - Financial Economics - - General - - - Financial Crises
    • G13 - Financial Economics - - General Financial Markets - - - Contingent Pricing; Futures Pricing
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation

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