Prasanna Gai


Asset Encumbrance, Bank Funding and Financial Fragility

Staff Working Paper 2016-16 Toni Ahnert, Kartik Anand, Prasanna Gai, James Chapman
How does asset encumbrance affect the fragility of intermediaries subject to rollover risk? We offer a model in which a bank issues covered bonds backed by a pool of assets that is bankruptcy remote and replenished following losses.

The Safety of Government Debt

Staff Working Paper 2013-34 Kartik Anand, Prasanna Gai
We examine the safety of government bonds in the presence of Knightian uncertainty amongst financial market participants. In our model, the information insensitivity of government bonds is driven by strategic complementarities across counterparties and the structure of trading relationships.

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