Under Basel III rules, banks become subject to a liquidity coverage ratio (LCR) from 2015 onwards, to promote short …-term resilience. We investigate the effects of such liquidity regulation on bank liquid assets and liabilities. Results indicate co …-integration of liquid assets and liabilities, to maintain a minimum short-term liquidity buffer. Still, microprudential regulation …

: undiversifiable interest rate risk and shocks to aggregate liquidity demand. Mutual funds are inefficient when the economy faces … undiversifiable interest rate risk. However, if only aggregate liquidity demand is stochastic, mutual funds can implement the social … optimum even when liquidity demand is not directly observed. …

I revisit the Diamond-Dybvig model of liquidity insurance in the presence of hidden trades. The key result is that in … this environment deposit-taking banks are not necessary for the efficient provision of liquidity. Mutual funds are … constrained efficient when supplemented with the same government liquidity regulation that is required to make a banking system …

ownership relative to private ownership lie in the liquidity of public ownership. While the liquidity of public ownership lets … shareholders trade easily and supply capital at a lower cost, the liquidity-engendered trading also results in stochastic shocks to … higher cost of capital. Thus, capital market liquidity, while being a principal advantage of public ownership, also has a …

-derstand how this individual choice process works. The literature of currency useconcerns primarily theory, in the sense that …