speculative trading increases. As a result, market liquidity deteriorates and short-term volatility rises. Our findings hold for a …

speculative trading increases. As a result, market liquidity deteriorates and short-term volatility rises. Our findings hold for a …

following the auctions. This effect is stronger when market volatility is higher. We rationalize both findings using a simple …

We assess the quantitative implications of collateral re-use on leverage, volatility, and welfare within an infinite … used to back more transactions. Re-use thus contributes to the buildup of leverage and significantly increases volatility … in financial markets. When introducing limits on re-use, we find that volatility is strictly decreasing as these limits …

following the auctions. This effect is stronger when market volatility is higher. We rationalize both findings using a simple …

We assess the quantitative implications of collateral re-use on leverage, volatility, and welfare within an infinite … used to back more transactions. Re-use thus contributes to the buildup of leverage and significantly increases volatility … in financial markets. When introducing limits on re-use, we find that volatility is strictly decreasing as these limits …