Perotti, Enrico; Suarez, Javier - 2011
risk externalities. It focuses on the relativemerit of price versus quantity rules, showing how they target different … incentives for risk creation.When banks differ in credit opportunities, a Pigovian tax on short-term funding is efficient in … containing risk and preserving credit quality, while quantity-based fundingratios are distorsionary. Liquidity buffers are either …