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Corporate Bond Liquidity During the COVID-19 Crisis

Kargar, Mahyar - 2020

We study liquidity conditions in the corporate bond market during the COVID-19 pandemic, and the effects of the … unprecedented interventions by the Federal Reserve. We find that, at the height of the crisis, liquidity conditions deteriorated … "lean against the wind" and bid-ask spreads declined. To study the causal impact of the interventions on market liquidity …

Persistent link: https://www.econbiz.de/10012481550

Trading and Liquidity with Limited Cognition

Biais, Bruno - 2010

We study the reaction of financial markets to aggregate liquidity shocks when traders face cognition limits. While each …

Persistent link: https://www.econbiz.de/10012462030

Interpreting the Unconventional U.S. Monetary Policy of 2007-09

Reis, Ricardo - 2010

compares the Federal Reserve's actions with the literature on optimal policy in a liquidity trap. The theory suggests that, to … securities markets can restore liquidity with fewer government funds than extending credit to the originators of loans …

Persistent link: https://www.econbiz.de/10012462989

Crises and Liquidity in Over-the-Counter Markets

Lagos, Ricardo - 2009

We study the efficiency of dealers' liquidity provision and the desirability of policy intervention in over …' asset demands that lasts until a random recovery time. In this context, dealers can provide liquidity to outside investors …

Persistent link: https://www.econbiz.de/10012463235

Liquidity Shocks and Order Book Dynamics

Biais, Bruno - 2009

monitor markets continuously. We study how limit order markets absorb transient liquidity shocks, which occur when a …

Persistent link: https://www.econbiz.de/10012463640

Crashes and Recoveries in Illiquid Markets

Lagos, Ricardo - 2008

We study the dynamics of liquidity provision by dealers during an asset market crash, described as a temporary negative …, persistence) under which dealers provide liquidity to investors following the crash. We also characterize the conditions under … which dealers incentives to provide liquidity are consistent with market efficiency …

Persistent link: https://www.econbiz.de/10012464526

Regulatory Free Cash Flow and the High Cost of Insurance Company Failures

Hall, Brian J. - 1998

Why is the cost of resolving insurance company failures so high? Evidence in this paper suggests that the state insurance regulatory bodies in charge of the liquidation process turn over an average of only 33 cents for each $1.00 of pre-insolvency assets to the guaranty funds (the state agencies...

Persistent link: https://www.econbiz.de/10012471974

The Moral Hazard of Insuring the Insurers

Bohn, James G. - 1997

State guaranty funds are quasi-governmental agencies that provide insurance to policyholders against the risk of insurance company failure. But insurance provided by guaranty funds, like all insurance, creates moral hazard problems, especially for companies that are insolvent or near-insolvent....

Persistent link: https://www.econbiz.de/10012472917

The Myth of the Patient Japanese : Corporate Myopia and Financial Distress in Japan and the US

Hall, Brian J. - 1996

It is widely believed that the stock-market oriented US financial system forces corporate managers to behave myopically relative to their Japanese counterparts, who operate in a bank-based system. We hypothesize that if US firms are more myopic than Japanese firms, then episodes of financial...

Persistent link: https://www.econbiz.de/10012473010

Property and Casualty Solvency Funds as a Tax and Social Insurance System

Bohn, James - 1995

When a Property and Casualty (P&C) insurance company becomes insolvent, solvent insurance companies are forced to pay assessments (a form of taxation) to state guarantee funds ('solvency funds') in order to protect the policyholders of the failed companies. We produce estimates of the costs to...

Persistent link: https://www.econbiz.de/10012473671