Nyborg, Kjell G; Östberg, Per - C.E.P.R. Discussion Papers - 2010
We argue that there is a connection between the interbank market for liquidity and the broader financial markets, which … has its basis in demand for liquidity by banks. Tightness in the interbank market for liquidity leads banks to engage in … what we term "liquidity pull-back," which involves selling financial assets either by banks directly or by levered …