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Liquidity Dependence and the Waxing and Waning of Central Bank Balance Sheets

Acharya, Viral V.; Chauhan, Rahul S.; Rajan, Raghuram Govind - National Bureau of Economic Research - 2023

in 2017, there was no commensurate shrinkage of these claims on liquidity. Consequently, the financial sector was left … more sensitive to potential liquidity shocks, with weaker-capitalized banks most exposed. This necessitated Fed liquidity … provision in September 2019 and again in March 2020. Liquidity-risk-exposed banks suffered the most drawdowns and the largest …

Persistent link: https://www.econbiz.de/10014247971

Interest Rate Implications for Fiscal and Monetary Policies : A Postscript on the Government Budget Constraint

Friedman, Benjamin M. - 1982

An earlier paper by the author investigated the quantitative implications, for the effectiveness of fiscal and monetary policies, of a model treating the determination of long-term interest rates by explicitly imposing the market clearing equilibrium condition that the quantity of bonds issued...

Persistent link: https://www.econbiz.de/10012478225

The Determination of Long-Term Interest Rates : Implications for Monetary and Fiscal Policies

Friedman, Benjamin M. - 1979

The object of this paper is to bring to bear on financial-non financial interactions a richer approach to modeling the determination of long-term interest rates. in a series of previous papers. I have developed an alternative model based explicitly on the truism that any factor affecting...

Persistent link: https://www.econbiz.de/10012478782

Contingent Credit Under Stress

Acharya, Viral V.; Jager, Maximilian; Steffen, Sascha - National Bureau of Economic Research - 2023

' provision of liquidity insurance in the form of credit lines, their significance in managing corporate liquidity, and the …

Persistent link: https://www.econbiz.de/10014437040

Implementation of Monetary Policy : How Do Central Banks Set Interest Rates?

Friedman, Benjamin M. - 2010

variation in the supply of central bank liabilities. In effect, the announcement effect has displaced the liquidity effect as …-system, or Japan. Structural estimates of banks' reserve demand, at a frequency corresponding to the required reserve maintenance … period, show no interest elasticity for the U.S. or the Euro-system (but some elasticity for Japan). The chapter next …

Persistent link: https://www.econbiz.de/10012462492

The Internal Governance of Firms

Acharya, Viral V. - 2009

We develop a model of internal governance where the self-serving actions of top management are limited by the potential reaction of subordinates. Internal governance can mitigate agency problems and ensure that firms have substantial value, even with little or no external governance by...

Persistent link: https://www.econbiz.de/10012463081

Debt Restructuring

Friedman, Benjamin M. - 2000

What difference does it make, and for whom, whether the nonperforming debts of emerging market borrowers are restructured? This paper begins by positing a set of counterfactual conditions under which restructuring would not matter, and then shows how several ways in which the actual world of...

Persistent link: https://www.econbiz.de/10012471039

Zombie Lending : Theoretical, International and Historical Perspectives

Acharya, Viral V.; Crosignani, Matteo; Eisert, Tim; … - National Bureau of Economic Research - 2022

This paper surveys the theory on zombie lending incentives and the consequences of zombie lending for the real economy. It also offers a historical perspective by reviewing the growing empirical evidence on zombie lending along three dimensions: (i) the role of under-capitalized banks, (ii)...

Persistent link: https://www.econbiz.de/10013190998

Liquidity Risk of Corporate Bond Returns : A Conditional Approach

Acharya, Viral V. - 2010

We study the exposure of the US corporate bond returns to liquidity shocks of stocks and Treasury bonds over the period … 1973 - 2007 in a regime - switching model. In one regime, liquidity shocks have mostly insignificant effects on bond prices … default), suggest the existence of time-varying liquidity risk of corporate bond returns conditional on episodes of flight to …

Persistent link: https://www.econbiz.de/10012462262

Rollover Risk and Market Freezes

Acharya, Viral V. - 2010

The crisis of 2007-09 has been characterized by a sudden freeze in the market for short-term, secured borrowing. We present a model that can explain a sudden collapse in the amount that can be borrowed against finitely-lived assets with little credit risk. The borrowing in this model takes the...

Persistent link: https://www.econbiz.de/10012462978