portfolio imbalances while facilitating ETF arbitrage. Basket inclusion improves bond liquidity, except in periods of large …

vehicles such as mutual funds and index futures. Because ETFs rely on arbitrage activity to synchronize their prices with the …

-financial-crisis regulatory environment. Global banks mainly use such funding to finance liquid, near risk-free arbitrage positions--in particular …, the interest on excess reserves arbitrage and the covered interest rate parity arbitrage. In this environment, we examine … global banks to the reform was a cutback in arbitrage positions that relied on unsecured funding, rather than a reduction in …

, even though it appears that the open-end form can be a serious impediment to arbitrage. I argue that the equilibrium degree …-suited to undertaking certain types of arbitrage trades. One implication of the analysis is that, even absent short …

arbitrage activity between ETFs and the underlying stocks. Consistent with this view, the effects are stronger for stocks with … arbitrage adds a new layer of trading to the underlying securities …