Arbeitspapier
Seeking safety
The scale of safe assets suggests a structural demand for a safe wealth share beyond transaction and liquidity roles. We study how investors achieve a reference wealth level by combining self-insurance and contingent liquidation of investment. Intermediaries improve upon autarky, insuring investors with poor self-insurance and limiting liquidation. However, delegation creates a conflict in states with residual risk. Demandable debt ensures safety-seeking investors can withdraw to implement a safe outcome, so private safety provision is fragile. Public debt crowds out private credit supply and investment, while deposit insurance crowds them in by reducing liquidation in residual risk states.
- Language
-
Englisch
- Bibliographic citation
-
Series: Bank of Canada Staff Working Paper ; No. 2018-41
- Classification
-
Wirtschaft
- Subject
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Financial institutions
- Event
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Geistige Schöpfung
- (who)
-
Ahnert, Toni
Perotti, Enrico C.
- Event
-
Veröffentlichung
- (who)
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Bank of Canada
- (where)
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Ottawa
- (when)
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2018
- DOI
-
doi:10.34989/swp-2018-41
- Handle
- Last update
-
10.03.2025, 11:44 AM CET
Data provider
This object is provided by:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Ahnert, Toni
- Perotti, Enrico C.
- Bank of Canada
Time of origin
- 2018
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