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Dr Matt Elliott

Matt Elliott

Title of research: Endogenous Financial Networks: Efficient Modularity and Why Shareholders Prevent It (joint with Jonathon Hazell, MIT)

We study the implications for systemic risk of the classic conflict of interest between debt-holders and equity-holders. Through trades banks can diversify idiosyncratic risks and avoid failures following small shocks. However, the resulting financial interdependencies can create systemic risk and the possibility of multiple failures following large shocks. A social planner would resolve this trade-off by creating modular financial networks. However, we assume equity-holders control banks and show their exist trades away from the efficient networks that increase equity value. Finally, we ask which trades are profitable more generally, and whether these systematically exacerbate or ameliorate systemic risk?

Project Update - August 2018

Project Update - April 2018

Project Update - August 2017

Project Update - April 2017

Project Update - July 2016

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Best Student Paper Award 2021 - competition is now open

Feb 12, 2021

For the last 13 years, Cambridge Finance is offering its Best Student Paper Award. The award comprises a cash honorarium of £1,000 and a certificate is awarded to the author of the best student paper in finance presented during the 2020-2021 academic year.

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