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drying up of liquidity. Financial firms raise short-term debt in order to finance assetpurchases. When asset fundamentals … de-lever by selling assets to better-capitalizedfirms. Thus the market liquidity of assets depends on the severity of the … market liquidity can in fact be greater.... …
Persistent link: https://www.econbiz.de/10005870414
While systemic risk—the risk of wholesale failure of banksand other financial institutions—is generally consideredto be the primary reason for supervision and regulation of thebanking industry, almost all regulatory rules treat such risk inisolation. In particular, they do not account for...
Persistent link: https://www.econbiz.de/10005869397