Liquidity production is a central function of banks. High leverage is optimal for banks in a model that has just enough …) safe/liquid debt, but no taxes or other traditional motives to lever up. Because only safe debt commands a liquidity …

Ensuring that a firm has sufficient liquidity to finance valuable projects that occur in the future is at the heart of … substantial literature on the ways in which firms manage liquidity has developed only recently. We argue that many of the key … issues in liquidity management can be understood through the lens of a framework in which firms face financial constraints …