Basel III has aided system stability, interbank models suggest

Model predicts future crashes will not be total wipeout

Sailboat
Staying afloat: banks are more resilient to downturns post-2008 reforms

Agent-based modelling of the interbank lending market shows post-2008 reforms should work as intended to reduce contagion in a future crisis. While the onset of a crisis may be faster, the forthcoming research finds it is less likely to happen, and would wipe out less of the banking system’s equity.

Using annual interbank exposure for the years from 2004 to 2013, the researchers ran 1,000 simulations for each year. In each simulation, randomly selected banks in the system received shocks of

To continue reading...

You need to sign in to use this feature. If you don’t have a Risk.net account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account here: