funds act as liquidity providers. Hedge funds using Lehman as prime broker could not trade after the bankruptcy, and these …-connected hedge funds in turn experienced greater declines in market liquidity following the bankruptcy than other stocks; and, the … effect was larger for ex ante illiquid stocks. We conclude that shocks to traders' funding liquidity reduce the market …

more than long-term credit. Firms responded by cutting their short-term loans for liquidity management purposes and …, firms increase cash and cut investment. Thus, trade credit offers a substitute source of liquidity that can insulate some … firms from bank liquidity shocks …

We study the reaction of financial markets to aggregate liquidity shocks when traders face cognition limits. While each …

I describe two amplifications mechanisms that operate during liquidity crises and discuss the scope for central bank … disengage from markets and increase their demand for liquidity. This behavior leads to a loss of liquidity and a crisis …

monitor markets continuously. We study how limit order markets absorb transient liquidity shocks, which occur when a …

question, focusing on liquidity constraints and uninsurable idiosyncratic risk. We consider a search model where agents use … reserves and the response of the economy tends to be larger. In this case, agents expect to be liquidity constrained and, due …

initial effects of financial innovation and crash can be summarized by a parameter that determines the "liquidity" or …, lower policy interest rates increase asset prices and steady-state output which, however, gets reversed as liquidity is … of capital may lower the welfare of the representative individual, even if the higher liquidity of capital is sustainable …