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A risky policy dominates a tight policy, even when no other banks set risky policies ( ), when where  A tight policy dominates a risky policy, even when other banks set risky policies ( when  ),  where  In the intermediate range , there are multiple equilibria, with risky (tight) credit policies optimal when others adopt risky (tight) policies too. 7  is defined analogously to  BIS Review 168/2010  , but is conditioned on tight rather than risky policies. 5  2.2  The model in a “global game”  Next, we apply the technology of Morris and Shin (2003) to define a unique equilibrium from this game. Assume that banks observe fundamentals with some small amount of noise, with bank receiving signal  where the noise terms are distributed in the population with continuous density with support on the real line. Our model satisfies the conditions set out in Morris and Shin (2003) for there to exist a unique equilibrium in this game. In particular, each bank’s strategy when in receipt of a low signal falling short conditional on its signal satisfies when in receipt of a high signal of some critical level , and adopting strategy exceeding some critical level . The condition determining this threshold is (see Appendix)  (1) Condition (1) allows us to perform comparative statics on the unique coordination equilibrium.