Cassola, Nuno; Hortacsu, Ali; Kastl, Jakub - Stanford Institute for Economic Policy Research … - 2009
In this paper we study European banks’ demand for short-term funds during the 2007 subprime market crisis. We use bidding data from the European Central Bank’s auctions for one-week loans. Through a model of bidding, we show that bank behavior reflects the cost of obtaining short-term funds...