pure illiquidity risk. It is shown that, when bad states are highly unlikely, public provision of liquidity may improve the …The paper models the interaction between risk taking in the financial sector and central bank policy for the case of … allocation, even though it encourages more risk taking (less liquid investment) by private banks. In general, however, there is …

We analyze the link between banking sector quality and sovereign risk in the whole European Union over 1999–2014. We … employ four different indicators of sovereign risk (including market- and opinion-based assessments), a rich set of … is associated with increased sovereign risk. The sector's depth provides mixed results. The stability (capital adequacy …

, 2008), this paper analyses the adequate policy response to endogenous systemic liquidity risk. We analyse the feedback …Traditionally, aggregate liquidity shocks are modelled as exogenous events. Extending our previous work (Cao & Illing … between lender of last resort policy and incentives of private banks, determining the aggregate amount of liquidity available …

impact of information asymmetry during the liquidity freeze and market run of October 1907 - one of the most severe financial … and, using a spread decomposition, we identify information risk as the largest component of illiquidity. Information costs … following the peak of the panic. Notably, market illiquidity risk is priced in the cross section of stock returns. Thus, our …

with the Arrow/Romer approach to endogenous growth to analyze the interaction of risk, growth, and inequality, the latter …. Major results include that growth, inequality, and risk are positively related in our model, but we also identify a hump …–shaped relationship between welfare and risk, indicating a tradeoff relationship between risk–pooling and growth in the determination of …