States, Banks, and the Financing of the Economy: Fiscal Policy and Sovereign Risk Perspectives
Bibliographic record
Abstract
Systemic risk is a complex phenomenon, and we ask the question how to decompose it to better understand its driving forces.Inspired by the structural VAR literature we evaluate the effects of contagion and common exposure on banks' capital by looking at interlinkages between banks' balance sheets.Contagion can occur through direct exposures, fire sales, and market-based sentiment, while common exposures result from portfolio overlaps.We estimate the model on granular balance sheet and interbank exposure data of the Canadian banking market.First, we document that contagion varies in time, with the highest levels around the Great Financial Crisis and lowest levels during the pandemic.Second, we find that after the introduction of Basel III the relative importance of risks has shifted towards those related to increased similarity in banks' exposures.Our new framework complements traditional stress-tests focused on single institutions by providing a comprehensive view of systemic risk.
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How this classification was reachedexpand
Full frame distilled prediction
Teacher imitationNot calibrated prevalence, not ground truth. Human validation pending. Learned from the 10,348 direct Codex labels and 10,348 direct Gemma labels. Candidate is the union of thresholded teacher heads; consensus is their intersection. These outputs are machine_predicted_unvalidated and are not human labels or direct frontier model labels.
Codex and Gemma teacher scores by category
| Category | Codex | Gemma |
|---|---|---|
| Metaresearch | 0.001 | 0.000 |
| Meta-epidemiology (narrow) | 0.000 | 0.000 |
| Meta-epidemiology (broad) | 0.000 | 0.000 |
| Bibliometrics | 0.000 | 0.000 |
| Science and technology studies | 0.000 | 0.001 |
| Scholarly communication | 0.000 | 0.000 |
| Open science | 0.001 | 0.001 |
| Research integrity | 0.000 | 0.000 |
| Insufficient payload (model declined to judge) | 0.000 | 0.000 |
Machine scores (provisional)
The two teacher heads of the student model, read on this work. A score orders the frame for review; it never asserts a category, and the validation status ships verbatim with every row.
Baseline scores from an immature model (maturity gate not passed, 7 training rounds). Scores rank; they never assert a category.
score_only:v0-immature-baseline · verbatim from the scoring run: score_only means the number may rank works, and no category label ships from itClassification
machine, unvalidatedMachine predicted; a candidate call from one teacher head, not a consensus.
How this classification was reached, model by model and score by score, is at the end of the page under "How this classification was reached".