35 years later: Diamond-Dybvig model of bank runs

Рет қаралды 19,315

6 жыл бұрын

Philip Dybvig, coauthor of the Diamond-Dybvig model, sits down with Dean Mark Taylor of Washington University’s Olin Business School to discuss his seminal paper 35 years after it was written.

Пікірлер: 19

@p.seetharaman6407 Жыл бұрын

Mark’s timing was just perfect in recognizing Phil’s contribution with an all-day just 4 years prior to his Nobel.. Proud to be Phil’s colleague.

@oluseunpaseda6977 Жыл бұрын

Big Congratulations on the Nobel Prize award, Prof. Philip Dybvig.

@SebastianSmellsGreat Жыл бұрын

Congratulation on the Nobel Prize!

@AR-nr4nu Жыл бұрын

Today this man won the Nobel prize in economics. What a legend.

@Tvidstein Жыл бұрын

Ob sich Prof Dybvig vor seiner reise nach Stockholm rasieren wird, scheint ein cooler Typ zu sein

@simonarens5890 8 ай бұрын

Im Gegenteil

@samuelskillern7365 Жыл бұрын

If I had the grades to get into WashU... Dr. Dybvig is a very intelligent man.

@RedShiftedDollar 3 жыл бұрын

Mr. Dyvbig, at around 11:25 explains the challenges with credit default swaps by highlighting that AIG could not deliver on the insurance they provided. They didn't hedge properly to back up the offering. Earlier he explains that FDIC insurance is good and that full deposit insurance would be best. I'm curious to know his opinions on the risks associated with this insurance. For example, suppose a systemic crisis resulted in very high claims. Would FDIC be adequate or could another AIG credit default swap like situation happen? Perhaps delay in reimbursement could be a risk. Does the existence of FDIC increase the risk of a systemic crisis because the knowledge that a local crisis will be covered changes the behavior of banks and depositors? Also, despite the insurance, are there other possible reasons why insured depositors would logically want to engage in a run? Perhaps certain political events such as the nationalization of banks, wars, a change in the terms of the FDIC insurance, or other major events could still trigger a run. The more I think about these topics, the more I begin to believe that FDIC is not as risk free and good as it seems and there are certain fragilities worth being aware of.

@tomlxyz 2 жыл бұрын

The main way the FDIC works is to ensure security and confidence so that the wider bank runs don't happen in the first place. It's basically just to prevent a self fulfulling prophecy. All other serious events you've listed arent really worth protecting by the FDIC imo because those might as well devalue the currency so what's the point? Also, other than AIG, the FDIC isn't profit oriented and doesn't try to maximize the number of insurance policies but rather has an incentive to prevent that.

@RedShiftedDollar 2 жыл бұрын

@@tomlxyz Bank runs are not always driven by lack of confidence and fear of loss. Sometimes they can be driven by the same profit seeking behavior that drives people to use banks in the first place. For instance, if interest rates ever go negative, withdrawing becomes the logical choice to seek the highest yield. Another driver could be a greed driven rush into bitcoin and other assets outside the financial system. From the bank’s perspective, withdrawing cash buy bitcoin is similar to withdrawing it to stuff under the mattress. Both destinations are outside the traditional financial system. If inflation rises, people become incentivized to spend their money now regardless of how safe they think keeping the money in the bank is. Bank runs can be driven by a lot more than fear of an insolvent bank.

@a.sayrol. 2 жыл бұрын

moral hazard

@rukhiyyaak6723 Жыл бұрын

Do u know the dybvig contribution what he did analysis pls explain