On the Optimal Design of a Financial Stability Fund.

We develop a model of a Financial Stability Fund (the "Fund" henceforth) for a union of sovereign countries. By design, the contract prevents country defaults, as well as undesired expected losses, which in a union translate into excessive risk mutualizations. A participant country has greater abili...

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Bibliographic Details

Published in:	Review of Economic Studies Vol. 93; no. 4; pp. 2135 - 2181
Main Authors:	Ábrahám, Árpád, Carceles-Poveda, Eva, Liu, Yan, Marimon, Ramon
Format:	Article
Published:	Oxford University Press / USA Jul2026
Subjects:	Public debts International economic integration Stabilization funds Risk sharing European Sovereign Debt Crisis, 2009-2018 Moral hazard Counterparty risk
Online Access:	View this record in EBSCOhost