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dc.contributor.authorGennaioli, Nicola
dc.contributor.authorShleifer, Andrei
dc.contributor.authorVishny, Robert
dc.date.accessioned2013-07-26T14:06:15Z
dc.date.issued2012
dc.identifier.citationGennaioli, Nicola, Andrei Shleifer, and Robert W. Vishny. 2012. Neglected risks, financial innovation and financial fragility. Journal of Financial Economics 104(3): 452-468.en_US
dc.identifier.issn0304-405Xen_US
dc.identifier.urihttp://nrs.harvard.edu/urn-3:HUL.InstRepos:10886835
dc.description.abstractWe present a standard model of financial innovation, in which intermediaries engineer securities with cash flows that investors seek, but modify two assumptions. First, investors (and possibly intermediaries) neglect certain unlikely risks. Second, investors demand securities with safe cash flows. Financial intermediaries cater to these preferences and beliefs by engineering securities perceived to be safe but exposed to neglected risks. Because the risks are neglected, security issuance is excessive. As investors eventually recognize these risks, they fly back to the safety of traditional securities and markets become fragile, even without leverage, precisely because the volume of new claims is excessive.en_US
dc.description.sponsorshipEconomicsen_US
dc.language.isoen_USen_US
dc.publisherElsevieren_US
dc.relation.isversionofdx.doi.org/10.1016/j.jfineco.2011.05.005en_US
dash.licenseOAP
dc.subjectbanksen_US
dc.subjectlocal thinkingen_US
dc.subjectcrisisen_US
dc.titleNeglected Risks, Financial Innovation, and Financial Fragilityen_US
dc.typeJournal Articleen_US
dc.description.versionAccepted Manuscripten_US
dc.relation.journalJournal of Financial Economicsen_US
dash.depositing.authorShleifer, Andrei
dc.date.available2013-07-26T14:06:15Z
dc.identifier.doi10.1016/j.jfineco.2011.05.005*
dash.contributor.affiliatedShleifer, Andrei


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