Anonymous Lending and Rollover Risk

70 Pages Posted: 14 Dec 2017 Last revised: 4 Feb 2021

See all articles by Tobias Dieler

Tobias Dieler

University of Bristol - Department of Finance and Accounting

Loriano Mancini

Università della Svizzera italiana (USI Lugano); Swiss Finance Institute

Date Written: May 20, 2020


Market design matters when heterogeneous borrowers roll over loans, facing funding shocks. Borrower anonymity is a key feature of various financial markets, such as short term, interbank lending markets. We show that anonymous markets experience systemic runs for large shocks, but provide insurance against rollover risk for moderate shocks. Insurance operates via loan contracts, pooling high and low quality borrowers, and is welfare enhancing when early liquidation of the project is costlier than continuation. Non anonymous markets allocate more funding to high quality borrowers, but moderate shocks trigger runs on low quality borrowers. When funding shocks have large variance, non anonymous markets generate larger welfare than anonymous markets. We study other market features, such as contract novation, default fund and collateral. In anonymous markets, novation and default fund reduce the risk of systemic runs. Collateral aligns private incentives with the socially optimal strategy, inducing the liquidation of inefficient projects.

Keywords: asymmetric information, resource allocation, financial stability, social welfare

JEL Classification: G01, G14, G21, G28

Suggested Citation

Dieler, Tobias and Mancini, Loriano, Anonymous Lending and Rollover Risk (May 20, 2020). Swiss Finance Institute Research Paper No. 18-06, Available at SSRN: or

Tobias Dieler (Contact Author)

University of Bristol - Department of Finance and Accounting ( email )

Tyndalls Park Road 15-19
Bristol, BS8 1PY
United Kingdom


Loriano Mancini

Università della Svizzera italiana (USI Lugano) ( email )

Via Giuseppe Buffi 6
6904 Lugano, CH-6904
+41 (0)91 912 46 47 (Fax)


Swiss Finance Institute ( email )

c/o University of Geneva
40, Bd du Pont-d'Arve
CH-1211 Geneva 4

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