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Distress selling and asset market feedback

Listed author(s):
  • Ilhyock Shim
  • Goetz von Peter

This paper examines the process of distress selling and asset market feedback. It splits this process into several stages, in order to analyse what triggers distress selling, why asset prices fall, and how falling prices generate additional rounds of selling. This framework enables us to understand and compare models relevant to distress selling from diverse literatures. The paper also considers what policy options are available at each stage to mitigate the adverse economic consequences of distress selling and asset market feedback.

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Paper provided by Bank for International Settlements in its series BIS Working Papers with number 229.

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Length: 55 pages
Date of creation: Jun 2007
Handle: RePEc:bis:biswps:229
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