[Game Theory Reading] Reading: (Thu, 18 June, 1; 15pm) Systemic Risk in Financial Networks

[Dengji Zhao]

Dear all,

In this Thursday's game theory reading group, AIC PhD candidate Laurie
Carver will talk about his research on regulation of systemic risk in
financial networks.

Time/Venue: 18 June, 1:15pm - 2:00pm / B32 3073

Online participation: http://goo.gl/bTKsje

Title:
Regulation of systemic risk in financial networks

Abstract:

The financial crisis of 2008 cost the UK, US and some EU governments
several trillion dollars in public "bail out" subsidies. It was so bad and
so broad because of "systemic risk" - the network of debt interlinking bank
balance sheets allowed for the contagion of losses between them. Some
attempts to tax banks' systemic riskiness have been proposed, to try to
ensure they pay more of the costs of future bail outs. But which tax is
best depends on how the network will react to it, and there are at present
no good models for analysing that. I am developing one, based on
multilateral bargaining games - with the principal twist being the network
effect means the bargaining set is not convex, so standard solutions like
the Nash solution should not be naively applied.



To access all previous talks:
https://sites.google.com/site/sotonecsreadinggroups/resources

Best,
Dengji
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