Freixas, Xavier; Parigi, Bruno M.; Rochet, Jean-Charles - 2003
interbank market and of the closure policy. In our set up, the results depend upon the existence of moral hazard. If the main …?ciency of an unsecured interbank market; if instead, the main source of moral hazard is loans monitoring, then the interbank … market should be secured and the LOLR should never intervene. …