Distress Selling and Asset Market Feedback

55 Pages Posted: 25 Sep 2007

See all articles by Ilhyock Shim

Ilhyock Shim

Bank for International Settlements (BIS)

Goetz von Peter

Bank for International Settlements - Research and Policy Analysis

Multiple version iconThere are 2 versions of this paper

Date Written: June 2007

Abstract

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.

Keywords: Financial distress, distress selling, asset market feedback, banking crises, financial instability

JEL Classification: G10, G18, G33, E44, E58

Suggested Citation

Shim, Ilhyock and von Peter, Goetz, Distress Selling and Asset Market Feedback (June 2007). BIS Working Paper No. 229, Available at SSRN: https://ssrn.com/abstract=1013988 or http://dx.doi.org/10.2139/ssrn.1013988

Ilhyock Shim (Contact Author)

Bank for International Settlements (BIS) ( email )

78F, Two International Finance Centre
8 Finance Street, Central
Hong Kong, n/a n/a
Hong Kong

HOME PAGE: http://www.bis.org/author/ilhyock_shim.htm

Goetz Von Peter

Bank for International Settlements - Research and Policy Analysis ( email )

CH-4002 Basel, Basel-Stadt
Switzerland
+ 41 61 280 8840 (Phone)

HOME PAGE: http://www.bis.org/author/goetz_von_peter.htm

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