provided liquidity against a range of assets during 2008-09. Dealers with lower equity returns and greater leverage prior to … liquidity in explaining dealer behavior. The results suggest that both financial performance and balance sheet liquidity play a …

in 2017, there was no commensurate shrinkage of these claims on liquidity. Consequently, the financial sector was left … more sensitive to potential liquidity shocks, with weaker-capitalized banks most exposed. This necessitated Fed liquidity … provision in September 2019 and again in March 2020. Liquidity-risk-exposed banks suffered the most drawdowns and the largest …

We study the interbank lending and asset sales markets in which banks with surplus liquidity have market power …

When liquidity chasing banks is high, loan officers (or risk-takers) inside banks expect future losses to be readily … Banks should "lean against bank liquidity." In particular, Central Banks should adopt a contractionary monetary policy in … times of excessive bank liquidity …

We study liquidity transfers between banks through the interbank borrowing and asset sale markets when(i)surplus banks … providing liquidity have market power, ii)there are frictions in the lending market due to moral hazard, and(iii)assets are bank … markets, or is prepared to extend potentially loss-making loans. The public provision of liquidity to banks, in fact its mere …

reserve holdings. Normally, central bank balance sheet expansion will enhance the net future availability of liquidity to the … system. However, in episodes of stress when a large fraction of claims on liquidity are exercised, the demand for liquidity … may hoard reserves to bolster their own prospects, contributing significantly to liquidity shortages. Therefore, because …

reserve holdings. Normally, central bank balance sheet expansion will enhance the net future availability of liquidity to the … system. However, in episodes of stress when a large fraction of claims on liquidity are exercised, the demand for liquidity … may hoard reserves to bolster their own prospects, contributing significantly to liquidity shortages. Therefore, because …

during quantitative tightening starting in 2017, there was no commensurate shrinkage of these claims on liquidity …. Consequently, the past expansion of the Fed’s balance sheet left the financial sector more sensitive to potential liquidity shocks … when the Fed started shrinking it, necessitating Fed liquidity provision in September 2019 and again in March 2020. If the …

We study liquidity transfers between banks through the interbank borrowing and asset sale markets when, (i) surplus …) compared to outside markets, or is prepared to extend potentially loss-making loans. The public provision of liquidity to banks …, in fact its mere credibility, can thus improve the private allocation of liquidity among banks. This rationale for …