TY  - BOOK
AU  - Brunnermeier,Markus K.
AU  - Oehmke,Martin
ED  - National Bureau of Economic Research.
TI  - The Maturity Rat Race
T2  - NBER working paper series
PY  - 2010///
CY  - Cambridge, Mass.
PB  - National Bureau of Economic Research
N1  - December 2010; Hardcopy version available to institutional subscribers
N2  - We develop a model of endogenous maturity structure for financial institutions that borrow from multiple creditors. We show that a maturity rat race can occur: an individual creditor can have an incentive to shorten the maturity of his own loan to the institution, allowing him to adjust his financing terms or pull out before other creditors can. This, in turn, causes all other lenders to shorten their maturity as well, leading to excessively short-term financing. This rat race occurs when interim information is mostly about the probability of default rather than the recovery in default, and is most pronounced during volatile periods and crises. Overall, firms are exposed to unnecessary rollover risk
UR  - https://www.nber.org/papers/w16607
UR  - http://dx.doi.org/10.3386/w16607
ER  -