Traditionally, aggregate liquidity shocks are modelled as exogenous events. Extending our previous work (Cao & Illing …, 2008), this paper analyses the adequate policy response to endogenous systemic liquidity risk. We analyse the feedback … between lender of last resort policy and incentives of private banks, determining the aggregate amount of liquidity available …

When agents are liquidity constrained, two options exist — sell assets or borrow. We compare the allocations arising in …

measure of financial liberalization, we focus on the history of interstate-banking deregulation during the 1980s, i.e. prior … of deregulation: in states that opened their banking markets to out-of-state banks earlier, house prices were more …

documents the existence of an asymmetric relationship between market liquidity and trading imbalances: when quoted spreads rise … (fall) and liquidity falls (increases) buy (sell) orders tend to prevail. Risk-averse market-makers, with inventory … characteristics, stock market volatility, macroeconomic releases and liquidity management operations of the monetary authorities. …

, populations are shrinking and ageing at the same time. This paper explores the impact of demographic change on the banking …