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Hart, Oliver; Zingales, Luigi - C.E.P.R. Discussion Papers - 2011

We study an economy where the lack of a simultaneous double coincidence of wants creates the need for a relatively safe asset (money). We show that, even in the absence of asymmetric information or an agency problem, the private provision of liquidity is inefficient. The reason is that liquidity...

Persistent link: https://www.econbiz.de/10009246599

Are Banks Passive Liquidity Backstops? Deposit Rates and Flows during the 2007-2009 Crisis

Acharya, Viral V; Mora, Nada - C.E.P.R. Discussion Papers - 2011

hedge to fund drawn credit lines and other commitments. We shed new light on this issue by studying the behavior of bank …

Persistent link: https://www.econbiz.de/10009399713

Money and Liquidity in Financial Markets

Nyborg, Kjell G; Östberg, Per - C.E.P.R. Discussion Papers - 2010

We argue that there is a connection between the interbank market for liquidity and the broader financial markets, which has its basis in demand for liquidity by banks. Tightness in the interbank market for liquidity leads banks to engage in what we term "liquidity pull-back," which involves...

Persistent link: https://www.econbiz.de/10008550326

The Price of Liquidity: Bank Characteristics and Market Conditions

Fecht, Falko; Nyborg, Kjell G; Rocholl, Jörg - C.E.P.R. Discussion Papers - 2010

We identify frictions in the market for liquidity as well as bank-specific and market-wide factors that affect the … prices that banks pay for liquidity, captured here by borrowing rates in repos with the central bank and benchmarked by the … overnight index swap. We have price data at the individual bank level and, unique to this paper, data on individual banks …

Persistent link: https://www.econbiz.de/10008530368

Securitization, Transparency and Liquidity

Pagano, Marco; Volpin, Paolo - C.E.P.R. Discussion Papers - 2008

We present a model in which issuers of asset backed securities choose to release coarse information to enhance the liquidity of their primary market, at the cost of reducing secondary market liquidity or even causing it to freeze. The degree of transparency is inefficiently low if the social...

Persistent link: https://www.econbiz.de/10005504512

How do Global Banks Scramble for Liquidity? Evidence from the Asset-Backed Commercial Paper Freeze of 2007

Acharya, Viral V; Afonso, Gara; Kovner, Anna - C.E.P.R. Discussion Papers - 2013

In August of 2007, banks faced a freeze in funding liquidity from the asset-backed commercial paper (ABCP) market. We investigate how banks scrambled for liquidity in response to this freeze and its implications for the real economy. Commercial banks in the United States raised deposits and took...

Persistent link: https://www.econbiz.de/10011083576

A dynamic analysis of bank bailouts and constructive ambiguity

Eijffinger, Sylvester C W; Nijskens, Rob - C.E.P.R. Discussion Papers - 2012

to liquidity assistance as a solution to forbearance. Faced with a bank that chooses capital and liquidity, the … credible, while always bailing out causes moral hazard. In equilibrium, the bank chooses above minimum capital and liquidity … is higher for a regulator more concerned about bank failure, and when the bailout penalty for the bank is higher; this …

Persistent link: https://www.econbiz.de/10011083609

Gambling for resurrection in Iceland: the rise and fall of the banks

Baldursson, Fridrik Mar; Portes, Richard - C.E.P.R. Discussion Papers - 2013

lending to the banks’ owners, although they strongly maintained otherwise in autumn 2007. Neither the FSA nor the Central Bank …

Persistent link: https://www.econbiz.de/10011084274

The Impact of Liquidity Regulation on Bank Intermediation

Bonner, Clemens; Eijffinger, Sylvester C W - C.E.P.R. Discussion Papers - 2012

impact on bank intermediation applying Regression Discontinuity Designs. Using a unique dataset on Dutch banks, we show that …

Persistent link: https://www.econbiz.de/10011084639

Liquidity and Inefficient Investment

Hart, Oliver; Zingales, Luigi - C.E.P.R. Discussion Papers - 2013

We study the role of fiscal policy in a complete markets model where the only friction is the non-pledgeability of human capital. We show that the competitive equilibrium is constrained inefficient, leading to too little risky investment. We also show that fiscal policy following a large...

Persistent link: https://www.econbiz.de/10011084716