Typical models of bankruptcy and collateral rely on incomplete asset markets. In fact, bankruptcy and collateral add … and Levine (2001) can be implemented in a model with bankruptcy and collateral. The equilibrium allocation is constrained … a model with bankruptcy and collateral is fragile in the sense of Leijonhufvud's "corridor of stability," however: If …

more than long-term credit. Firms responded by cutting their short-term loans for liquidity management purposes and …, firms increase cash and cut investment. Thus, trade credit offers a substitute source of liquidity that can insulate some … firms from bank liquidity shocks …

transactions occur at a discount to net asset value. Buyers average an annualized Public Market Equivalent (PME) of 1.023 compared …

make sure that all debts within the system are settled. The main result is that these liquidity needs are larger when these …

collateral is scarce. We call this process shadow banking. A rise in uncertainty raises demand for crash-proof liquidity, forcing … liquidity supply to contract, discount rates and collateral premia spike, prices and investment fall. The model produces slow …We build a macroeconomic model that centers on liquidity transformation in the financial sector. Intermediaries …

We use an extensive data set of bilateral exposures on credit default swap (CDS) to estimate the impact on collateral … demand of new margin and clearing practices and regulations. We decompose collateral demand for both customers and dealers … impact on collateral demand of more widespread initial margin requirements, increased novation of CDS to central clearing …

We develop a theory of how corporate lending and financial intermediation change based on the fundamentals of the firm … and its environment. We focus on the interaction between the prospective net worth or liquidity of an industry and the … firm's internal governance or pledgeability. Variations in prospective liquidity can induce changes in the nature …