FINANCIAL SAFETY NETS

• 成果类型: Article
• 署名作者: Bengui, Julien; Bianchi, Javier; Coulibaly, Louphou
• 署名单位: Universite de Montreal; Federal Reserve System - USA; Federal Reserve Bank - Minneapolis; National Bureau of Economic Research
• 刊物名称: INTERNATIONAL ECONOMIC REVIEW
• ISSN/ISSBN: 0020-6598
• DOI: 10.1111/iere.12346
• 发表日期: 2019
• 页码: 105-132
• 关键词: time-inconsistency; uncertainty; Bailouts; PRIVATE

摘要

We study the optimal design of financial safety nets under limited private credit, asking whether and when it is optimal to restrict ex ante the set of investors that can receive public liquidity support. When the government lacks commitment, we show that the optimally designed safety net covers only a subset of investors. Compared to an economy where all investors are protected, this results in more liquid portfolios, better social insurance, and higher welfare. Our results can rationalize the prevalence of limited safety nets as well as the coexistence of traditional and shadow banks.