000			01214nam a22001457a 4500
999			_c522884 _d522884
008			230612b ||||| |||| 00| 0 eng d
100			_aAltinoglu, Levent and Stiglitz, Joseph E. _941732
245			_aCollective moral hazard and the interbank market
260			_aAmerican Economic Journal: Macroeconomics
300			_a15(2), Apr, 2023: p.35-64
520			_aThe concentration of risk within the financial system leads to systemic instability. We propose a theory to explain the structure of the financial system and show how it alters the risk-taking incentives of financial institutions when the government optimally intervenes during crises. By issuing interbank claims, risky institutions endogenously become large and interconnected. This concentrated structure enables institutions to share the risk of systemic crises in a privately optimal way but leads to excessive risk taking even by peripheral institutions. Interconnectedness and excessive risk taking reinforce one another. Macroprudential regulation that limits the interconnectedness of risky institutions improves welfare.- Reproduced
773			_aAmerican Economic Journal: Macroeconomics
906			_aFINANCIAL SYSTEMS
942			_cAR