Crypto · Risk
what counterparty risks emerge from flash loan-enabled market manipulation?
Flash loans create unique attack vectors because they allow an actor to borrow large sums instantaneously without collateral, execute transactions that change market state, and repay within the same block.
when should banks adjust capital for climate transition asset stranding?
Banks should adjust capital for climate transition asset stranding when credible signals indicate a material and persistent increase in expected credit losses or a reduction in collateral values driven by
do programmable stablecoin redemption rules increase liquidity risk during runs?
Programmable features that control how and when stablecoins redeem can alter liquidity dynamics and, under stress, can increase the risk of runs. Evidence from policy research and central banking analysis
who is legally liable for smart contract oracle manipulation losses?
Legal liability for losses caused by smart contract oracle manipulation depends on how classical legal doctrines map onto decentralized systems. Outcomes hinge on who controls the oracle, the contractual relationships,
when should insurers recognize model drift in catastrophe pricing models?
Catastrophe pricing models should be reassessed when measurable performance deterioration or fundamental shifts in hazard drivers occur. Recognizing model drift requires both statistical monitoring and attention to evolving external science
which incentives most increase moral hazard in contingent capital instruments?
Contingent capital instruments can weaken prudent behavior when they create explicit or implicit expectations that losses will be shared or pushed onto others. Empirical and theoretical analyses identify several incentives
what challenges hinder accurate pricing of crypto custodial insurance risk?
Crypto custodial insurance pricing is hampered by several interacting uncertainties that challenge traditional actuarial models. Insurers need reliable frequency and severity estimates, but the crypto ecosystem offers limited historical loss
how does concentration of collateral affect systemic repo market risk?
Concentration of collateral in a few asset types, typically sovereign bonds and other high-quality liquid assets, raises systemic vulnerability in the repo market by narrowing the set of acceptable securities
when do oracle staking mechanisms create economic security risk?
Oracle staking—requiring data providers to lock tokens as collateral—can improve integrity by enabling slashing for bad data. However, these mechanisms create economic security risk when incentive design, market structure, or
which risk indicators forecast sudden de-risking by large asset managers?
Large asset managers can shift quickly from risk-on to risk-off when several measurable signals align. Regulators, academics, and market practitioners identify a set of risk indicators that tend to precede