Some have argued that recent increases in credit risk transfer are desirable because they
improve the diversification of risk. Others have suggested that they may be undesirable if …

The experience of banking crises in the 1930s was severe. Before this, assuring financial
stability was primarily the responsibility of central banks. The Bank of England had led the …

In this paper we study the optimal design of credit derivative contracts when banks have
private information about their ability in the loan market and are subject to capital …

How do non-publicly observable credit derivatives affect the design contracts that buyers
may offer to signal their own types? When credit derivative contracts are private, how do the …

KfW Entwicklungsbank has a long history of supporting microfinance through funding and
technical assistance. Apart from KfW funds, Financial Cooperation funding supplied by the …

Financial innovation and greater information availability have increased the tradability of
bank assets and have reduced banks' dependence on individual bank managers. We show …

We present a banking model with imperfect competition in which borrowers' access to credit
is improved when banks are able to transfer credit risks. However, the market for credit risk …

Ongoing financial innovation and greater information availability increase the tradability of
bank assets and reduce banks' dependence on individual bank managers as private …

Abstract Diamond and Rajan (J Finance 55: 2431–2465, 2000; Am Econ Rev Papers Proc
91: 422–425, 2001a; Carnegie–Rochester Conf Series Public Policy 54: 37–71, 2001b; J …

How does bank capital regulation affect the design of credit derivative contracts? How does
the opacity of the OTC credit derivative markets affect these contracts? In this paper we …