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Liquidity Dependence and the Waxing and Waning of Central Bank Balance Sheets

Acharya, Viral V.; Chauhan, Rahul S.; Rajan, Raghuram Govind - National Bureau of Economic Research - 2023

in 2017, there was no commensurate shrinkage of these claims on liquidity. Consequently, the financial sector was left … more sensitive to potential liquidity shocks, with weaker-capitalized banks most exposed. This necessitated Fed liquidity … provision in September 2019 and again in March 2020. Liquidity-risk-exposed banks suffered the most drawdowns and the largest …

Persistent link: https://www.econbiz.de/10014247971

The Determinants of Fiscal and Monetary Policies During the Covid-19 Crisis

Benmelech, Efraim - 2020

As countries around the world grapple with Covid-19, their economies are grinding to a halt. For the first time since the Great Depression both advanced economies and developing economies are in recession. Governments and central banks have responded to the pandemic and the economic crisis using...

Persistent link: https://www.econbiz.de/10012481316

The Degree of Judicial Enforcement and Credit Markets : Evidence from Japanese Household Panel Data

Horioka, Charles Yuji - 2010

In this paper, we conduct an empirical analysis of the impact of better judicial enforcement on the probability of being credit rationed, loan size, and the probability of bankruptcy using household-level data from the Japanese Panel Survey of Consumers, conducted by the Institute for Research...

Persistent link: https://www.econbiz.de/10012463019

Contingent Credit Under Stress

Acharya, Viral V.; Jager, Maximilian; Steffen, Sascha - National Bureau of Economic Research - 2023

' provision of liquidity insurance in the form of credit lines, their significance in managing corporate liquidity, and the …

Persistent link: https://www.econbiz.de/10014437040

Rollover Risk and Market Freezes

Acharya, Viral V. - 2010

The crisis of 2007-09 has been characterized by a sudden freeze in the market for short-term, secured borrowing. We present a model that can explain a sudden collapse in the amount that can be borrowed against finitely-lived assets with little credit risk. The borrowing in this model takes the...

Persistent link: https://www.econbiz.de/10012462978

Liquidity, Liquidity Everywhere, Not a Drop to Use - Why Flooding Banks with Central Bank Reserves May Not Expand Liquidity

Acharya, Viral V.; Rajan, Raghuram Govind - National Bureau of Economic Research - 2022

reserves, which are also claims on liquidity. In ordinary times, when these claims are not called on, central bank balance … sheet expansion will typically enhance the net availability of liquidity to the system. However, in times of stress when … these offsetting claims on liquidity are exercised, the demand for liquidity can be significantly more. Furthermore, liquid …

Persistent link: https://www.econbiz.de/10012814455

Monetary Easing, Leveraged Payouts and Lack of Investment

Acharya, Viral V. - 2019

This paper studies a model in which a low monetary policy rate lowers the cost of capital for entrepreneurs, potentially spurring productive investment. Low interest rates, however, also induce entrepreneurs to lever up so as to increase payouts to equity. Whereas such leveraged payouts...

Persistent link: https://www.econbiz.de/10012480414

Does the Lack of Financial Stability Impair the Transmission of Monetary Policy?

Acharya, Viral V. - 2019

We investigate the transmission of central bank liquidity to bank deposits and loan spreads in Europe over the period … bank liquidity does not translate into lower loan spreads for high-risk banks for maturities beyond one year, even as it …

Persistent link: https://www.econbiz.de/10012480422

The Anatomy of the Transmission of Macroprudential Policies

Acharya, Viral V. - 2020

We analyze how regulatory constraints on household leverage--in the form of loan-to-income and loan-to-value limits--affect residential mortgage credit and house prices as well as other asset classes not directly targeted by the limits. Supervisory loan level data suggest that mortgage credit is...

Persistent link: https://www.econbiz.de/10012481874

Credit Traps

Benmelech, Efraim - 2010

, under certain circumstances, the credit channel transmission mechanism fails in that liquidity injections by the central … show how they can arise due to the interplay between financing frictions, liquidity, and collateral values. Our analysis …

Persistent link: https://www.econbiz.de/10012462457