liquidity may be related positively to the longer-term probability of default. Our empirical analysis confirms these predictions …

Liquidity and solvency have been called the "heavenly twins" of banking (Goodhart, Charles, 'Liquidity Risk Management …', Financial Stability Review - Special Issue on Liquidity, Banque de France, No. 11, February, 2008). Since these "twins" interact … grounded in information and confidence, and it is confidence which in the end determines liquidity. In other words, liquidity …

and of income losses following a crisis. She tests the validity of "insurance" and "liquidity" models of currency crisis …

This paper proposes a positive theory of the links between banks' capitalisation and their liquidity risk taking, the … extent of fire-sale problems, and the severity of liquidity crises. In a basic framework with a single bank, we find that … banks' incentives to hold liquidity for precautionary reasons are increasing with their capital. In a continuum …