Banking, the Macroeconomy, Regulation and Macroprudential Policies

Insurance contracts contingent on macroeconomic shocks or on average bank capital could be a way of insuring against systemic crises. With insurance, banks are recapitalized when negative events would otherwise cause a write-down of capital, or even bank insolvency. In particular, we are concerned with the following issues:

How should banks be regulated from a micro-economic and macro-economic perspective?
How should macro-prudential policies be designed and implemented?
Will banking crises be avoided by fair risk premia in loan provision or deposit insurance?
Can banking crises be avoided by private insurance schemes?
How can or should private insurance be organized?
Which type of indicators of the financial health of the banking sector should be used in insurance contracts?
How does financial intermediation contingent on macroeconomic events affect risk-allocation and the probability of banking crises?
Can Crisis Contracts help to avoid banking crises?

Publications

Regulatory Competition in Banking: A General Equilibrium Approach, Journal of Banking and Finance, forthcoming .
(Hans Gersbach, Hans Haller and Stylianos Papageorgiou)
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Crisis Contracts, Economic Theory, 70, 2020, 121-164 .
(Elias Aptus, Volker Britz, and Hans Gersbach)
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Banking-on-the-Average Rules, CESifo Economic Studies, 65(2), 2019, 131–153.
(Hans Gersbach and Volker Hahn)
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Capital Regulation and Credit Fluctuations, Journal of Monetary Economics, 90, 2017, 113-124.
(Hans Gersbach and Jean-Charles Rochet)
external pageWorking Paper Version
The Macroeconomics of Modigliani-Miller, Journal of Economic Theory, 157, 2015, 1081-1113.
(Hans Haller, Hans Gersbach and Jürg Müller)
external pageWorking Paper Version
Default Correlations in the Merton Model, Review of Finance, European Finance Association, 18(5), 2014, 1775-1809.
(Ulrich Erlenmaier and Hans Gersbach)
external pageWorking Paper Version
Taking Banks to Solow, IEA Series, Contemporary Issues in Macroeconomics, 2014, 176-198.
(Hans Gersbach, Jean-Charles Rochet and Martin Scheffel)
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Bank Capital and the Optimal Capital Structure of an Economy, European Economic Review, 64, 2013, 241-255.
(Hans Gersbach)
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Aggregate Investment Externalities and Macroprudential Regulation, Journal of Money, Credit, and Banking, 44(Supplement S2), 2012, 73-109.
(Hans Gersbach and Jean-Charles Rochet)
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Sophistication in Risk Management, Bank Equity, and Stability, International Review of Finance, 10(1), 2010, 63-91.
(Hans Gersbach and Jan Wenzelburger)
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On the Coexistence of Banks and Markets, Scandinavian Journal of Economics, 109(2), 2007, 225-243.
(Hans Gersbach and Harald Uhlig)
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Preventing Banking Crises - with Private Insurance? CESifo Economic Studies, 59(4), 2013, 609-627.
(Hans Gersbach)
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Do Risk Premia Protect from Banking Crises?, Macroeconomic Dynamics, 12, 2008, 100-111.
(Hans Gersbach and Jan Wenzelburger)
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Debt Contracts and Collapse as Competition Phenomena, Journal of Financial Intermediation, 15(4), 2006, 556-574.
(Hans Gersbach and Harald Uhlig)
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Firm Defaults and the Correlation Effect, European Financial Management, 9 (3), 361-378, 2003.
(Hans Gersbach and Alexander Lipponer)
external pageWorking Paper Version

Columns/ Policy Briefs

Working Papers

DownloadOn Banking Regulation and Lobbying
(Hans Gersbach and Stylianos Papageorgiou)
DownloadFinancial Intermediation, Capital Accumulation, and Recovery
(Hans Gersbach, Jean-Charles Rochet and Martin Scheffel)
external pageDeposit Insurance and Reinsurance: A General Equilibrium Perspective
(Volker Britz, Hans Gersbach and Hans Haller)
DownloadContingent Contracts in Banking: Insurance or Risk Magnification? (PDF, 553 KB)
(Hans Gersbach)

Team Members

Hans Gersbach

Cooperation Partners

external pageHans Haller (Virginia Polytechnic Institute and State University)
external pageStylianos Papageorgiou (University of Cyprus)
external pageJean-Charles Rochet (University of Zurich)
external pageMartin Scheffel (KIT)
external pageHarald Uhlig (University of Chicago)
external pageJan Wenzelburger (University of Kaiserslautern)

Additional Information

From the Backyard of Banking Innovation

In two areas, in particular, we are looking back at more than a decade of research. Democracy, its potential and limitations, has been our focus since 1999. And our work on banking crises started as early as 1997 - long before the crisis of 2008.

Vintage Papers

Title: Private Insurance Against Systemic Crises?
First Version: external pageCEPR Discussion Paper No. 7342 (2009)
Latest Version: Download2011 (PDF, 272 KB)

Title: Can Contingent Contracts Insure the Economy Against Banking Crises?
First Versions:
A. Financial Intermediation and the Creation of Macroeconomic Risks, DownloadCESifo Working Paper No. 695 (2002)
B. Financial Intermediation with Contingent Contracts and Macroeconomic Risks, external pageCEPR Discussion Paper No. 4735 (2004)
Latest Version: Download2018 (PDF, 553 KB)

Title: Financial Intermediation, Capital Spillovers and Business Fluctuations
First Version: DownloadUniversity of Heidelberg Discussion Paper No. 273 (1998)
Latest Version: Download2004 (PDF, 290 KB)