Distress Selling and Asset Market Feedback

49 Pages Posted: 27 Nov 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

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Abstract

This paper examines the process of distress selling and asset market feedback. It splits this process into several stages, in order to analyze 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.

Suggested Citation

Shim, Ilhyock and von Peter, Goetz, Distress Selling and Asset Market Feedback. Financial Markets, Institutions & Instruments, Vol. 16, Issue 5, pp. 243-291, December 2007, Available at SSRN: https://ssrn.com/abstract=1032009 or http://dx.doi.org/10.1111/j.1468-0416.2007.00126.x

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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