show that transition to risk-free reference rates may exacerbate this friction. The adverse impact on credit supply is …

-and-repurchase (repo) contracts. Exemption from an automatic stay in bankruptcy enables financial intermediaries to raise greater liquidity … the cost of ex-post inefficiency when there are adverse aggregate shocks to the fundamental quality of collateral … shocks by engaging in collateral liquidations. Financial arbitrage by less leveraged financial intermediaries equilibrates …

amount of collateral assets accepted, (ii) the level of leverage and (iii) the level of trust and confidence. As credit … financial system. As trust began to recede, so did leverage and the amount of assets accepted as collateral, leading to a …