discipline by monitoring counterparty credit risk and theories highlighting that secured loans are less informational sensitive … provide more secured loans to replace unsecured lending, which is not consistent with speculative or precautionary liquidity …

the insurance sector. The downside risk of insurers is explicitly modelled by common and idiosyncratic risk factors. Since … reinsurance is important for the capacity of insurers, we measure risk dependence among European insurers and reinsurers. The … results point to a relatively low insurance sector wide risk. Dependence among insurers is higher than among reinsurers. …

: 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 …I analyze welfare properties of mutual funds in the Diamond-Dybvig model with two sources of aggregate risk …

This paper studies banks' liquidity provision in the Lagos and Wright model of monetary exchanges. With aggregate … uncertainty we show that banks sometimes exhaust their cash reserves and fail to satisfy their depositors' need of consumption … smoothing. The banking panics can be eliminated by the zero-interest policy for the perfect risk sharing, but the first best can …

Speeding up the exchange does not necessarily improve liquidity. The price quotes of high-frequency market makers are … more likely to meet speculative high-frequency "bandits", thus less likely to meet liquidity traders. The bid-ask spread is …