The reuse of collateral can support the efficient allocation of assets in the financial system. Exploiting a novel dataset, we quantify banks’ collateral reuse at the security level. We show that banks substantially increase their reuse of collateral in response to scarcity induced by central...

Does banks' zombie lending induced by unconventional monetary policy also allow zombie firms to leverage their trade credit borrowing? We first provide evidence suggesting that - even in Germany - particularly weak banks used the European Central Bank's very long-term refinancing operations...

We study the liquidity allocation among European banks around the Lehman insolvency using a novel dataset of all interbank loans settled via the Eurosystem’s payment system TARGET2. Following the Lehman insolvency, lenders in the overnight segment become sensitive to counterparty...

In absence of bank risk-taking behavior, opacity is defined as the inability of depositors, speculators and central banker to disentangle default risk and asset's return from the asset's value. We show the conditions under which opacity leads to runs on a solvent bank in equilibrium and...

Globalization and strengthening of integration processes have, among other things, also influenced some solutions relating to monetary sovereignty of particular countries. A great number of transition countries as well as some other underdeveloped countries are facing both inefficiency in their...

In this paper we focus on postwar US data and incorporate new nancial measures and monetary policy shocks in a vector autoregression (VAR) system in order to test whether one or the other has any real effect on the economy. We nd econometric evidence that these shocks and events are exogenous,...

Assessing the stability of the financial sector is becoming more common in many countries. This paper presents two useful approaches, applied to the Netherlands. First we discuss the results of a contagion analysis of the Dutch interbank market. We use various ways to measure linkages between...

This paper investigates the impact of macroeconomic and monetary news on U.S. Government bond rate level and volatility. Specifically, it checks if these news affect differently interest rate level and volatility during "stable" and "unstable" periods. "Unstable" periods correspond to the...

We analyze monetary conditions in US asset markets — corporate equity, real estate, Treasury bond and corporate & foreign bond — from a market specific perspective, proposing the concept of market leverage. Market leverage measures the average leverage of all asset holders in a particular...

The conduct of US monetary policy is often accompanied by controversial debates on the adequacy of monetary conditions. These can result from different concepts of excess liquidity measures. The paper analyzes the theoretical and empirical information content of these concepts for asset markets....