Distress Selling and Asset Market Feedback
Bank for International Settlements (BIS)
Goetz Von Peter
Bank for International Settlements - Research and Policy Analysis
BIS Working Paper No. 229
This paper examines the process of distress selling and asset market feedback. It splits this process into several stages, in order to analyse what triggers distress selling, why asset prices fall, and how falling prices generate additional rounds of selling. This framework enables us to understand and compare models relevant to distress selling from diverse literatures. The paper also considers what policy options are available at each stage to mitigate the adverse economic consequences of distress selling and asset market feedback.
Number of Pages in PDF File: 55
Keywords: Financial distress, distress selling, asset market feedback, banking crises, financial instability
JEL Classification: G10, G18, G33, E44, E58working papers series
Date posted: September 14, 2007
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