Slapped in the Face by the Invisible Hand: Banking and the Panic of 2007

By Gary B. Gorton. 2009

367 citations recorded by the source corpus.

View Paper: https://www.semanticscholar.org/paper/816c636efd46979f0bd387117e9acb02a0956ade

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Citations in the corpus

Liquidity Risk Management and Credit Supply in the Financial Crisis (2011, neutral): “1 Gorton (2009) and Gorton and Metrick (2009) draw parallels between the increase in haircuts in the repo markets and banking (footnote continued)”
What moves housing markets: A variance decomposition of the rent-price ratio (2009, background): “The increase in default rates on mortgages lead to a collapse in the price of mortgagebacked securities, which likely contributed to a run on the ''shadow " banking system (Gorton, 2009) and sharp devaluation of stock prices.”
Effects of Central Bank Intervention on the Interbank Market During the Subprime Crisis (2011, positive): “5 Our evidence that central bank intervention increases volatility in the interbank market supports Gorton (2009) and Heider et al.”
The Dark Side of Bank Wholesale Funding (2010, neutral): “d Liq ds = dRLiq ds p (1 mLiq)p(1 )(1 p) W+ dmLiq ds p(1 )(1 p) [D(X RD) +W (X RLiq)] (18) The rst term on the right-hand side is positive: it reects the reduction in the (5)Note that m and R are continuous at s : m (s ) = mLiq(s W ) and R(s ) = RLiq(s ).”
Cross-Border Banking and the International Transmission of Financial Distress During the Crisis of 2007-2008 (2010, background): “…banks controlled around 80% of the assets in the region's banking industry.3 The serious nancial distress of pan-European banks like Erste, KBC, and Societe Gen- 1See Brunnermeier (2009), Gorton (2009), and Ivashina and Scharfstein (2009) for a timeline of the 2007-2008 global nancial crisis.”
The evolution of a financial crisis: panic in the asset-backed commercial paper market (2009, background): “Another option proposed by Gorton (2009) for an alternative purpose of preventing destabilizing runs in the repurchase market, is to provide and require government insurance for all AAA-rated tranches of securitizations.”
The role of institutional investors in propagating the crisis of 2007-2008. (2012, positive): “In the precrisis period, these securitized bonds were designed to be safe, liquid, and information-insensitive (in the sense of Dang, Gorton, and Holmström, 2010), relative to corporate bonds with higher idiosyncratic risk and, therefore, a need for more intensive credit research.”
Manufacturing Tail Risk: A Perspective on the Financial Crisis of 2007-09 (2010, neutral): “, financial institutions outside the traditional banking system that provide very similar services (Adrian and Shin, 2009; Acharya et al., 2009a; Gorton, 2009).”