Firm-bank linkages and optimal policies after a rare disaster

• 成果类型: Article
• 署名作者: Segura, Anatoli; Villacorta, Alonso
• 署名单位: European Central Bank; Bank of Italy; University of California System; University of California Santa Cruz
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2023.05.002
• 发表日期: 2023
• 页码: 296-322
• 关键词: rare disasters; Covid-19; Lockdown; Firms' debt; moral hazard; Bank equity; Aggregate risk; Government policies

摘要

We study optimal government support following a rare disaster that creates heterogeneous firm liquidity needs. Firms' increase in debt reduces their output due to moral hazard. Banks are subject to a minimum capital requirement that limits deposit insurance costs upon bad aggregate shocks. Without government support, firms' moral hazard and banks' funding frictions reinforce each other amplifying output losses. Optimal support is imple-mented with firm-specific transfers combined with the provision of aggregate risk insur-ance through a capital requirement relaxation and a public preferred equity stake in banks. Our results shed light on suboptimality features in the actual policy responses to Covid-19 lockdowns. (c) 2023 Elsevier B.V. All rights reserved.