This article appeared in a journal published by Elsevier. The attached copy is furnished to the author for internal non-commercial research and education use, including for instruction at the authors...

ThisarticleappearedinajournalpublishedbyElsevier. Theattached copyisfurnishedtotheauthorforinternalnon-commercialresearch andeducationuse,includingforinstructionattheauthorsinstitution andsharingwithcolleagues. Otheruses,includingreproductionanddistribution,orsellingor licensingcopies,orpostingtopersonal,institutionalorthirdparty websitesareprohibited. Inmostcasesauthorsarepermittedtoposttheirversionofthe article(e.g. inWordorTexform)totheirpersonalwebsiteor institutionalrepository. Authorsrequiringfurtherinformation regardingElsevier’sarchivingandmanuscriptpoliciesare encouragedtovisit: http://www.elsevier.com/copyrightAuthor's personal copy Journal of Financial Economics 104 (2012) 421–424 Contents lists available at SciVerse ScienceDirect Journal of Financial Economics journal homepage: www.elsevier.com/locate/jfec Introduction Market institutions, ?nancial market risks, and the ?nancial crisis In 2008, the National Bureau of Economic Research industrial countries, of current relevance perhaps only in emerging-market nations. The reasoning was that deposit (NBER) decided to launch a research project to explore why the ?nancial crisis was so virulent and so damaging guarantees removed much of the rationale for depositors to totheeconomy.JamesPoterba,thechiefexecutiveof?cerof commence a bank run, because their deposits were not at the NBER, obtained generous funding from the Sloan Foun- risk. Little attention was paid to the possibility that there dation to support the project. He asked us to organize the could be a different type of run on banks, namely a run on project, with a focus on how interactions between ?nancial their wholesale funding rather than on their deposit fund- institutions, markets, and regulations affected the crisis; ing.Runswereattheheartofthe2008–2009?nancialcrisis, how such interactions could (or should) change; and how but they were runs on wholesale funding and were not internal incentives and pressures might have affected the always...