Central banks provide public liquidity to traditional (regulated) banks with the intention of stabilizing the financial … system. Shadow banks are not regulated, yet they indirectly access such liquidity through the interbank system. We build a … model that shows how public liquidity provision may change the linkages between traditional and shadow banks, increasing …

allows banks in different regions to smooth local liquidity shocks by borrowing and lending on a world interbank market. We … show under which conditions financial integration induces banks to reduce their liquidity holdings and to shift their … portfolios towards more profitable but less liquid investments. Integration helps reallocate liquidity when different banks are …

This paper explores how international money markets reflected credit and liquidity risks during the global financial … markets, while liquidity risk caused the difference across the currency denominations. They also support the view that a … shortage of US dollar as liquidity distorted the international money markets during the crisis. We find that coordinated …