Liquidity hoarding by banks and extreme volatility of the fed funds rate have been widely seen as severely disrupting … volatility. We develop a model with credit and liquidity frictions in the interbank market consistent with the empirical results … against liquidity shocks. Moreover, the intraday fed funds rate can spike above the discount rate and crash to near zero …

consists of a web of specialized financial institutions that conduct credit, maturity, and liquidity transformation without … direct, explicit access to public backstops. The lack of such access to sources of government liquidity and credit backstops …

specialized financial institutions that conduct credit, maturity, and liquidity transformation without direct, explicit access to … public backstops. The lack of such access to sources of government liquidity and credit backstops makes shadow banks …

and liquidity has increased since the late 1990s, and to a lesser extent because economic growth has slowed. We reach this …

In standard Walrasian macro-finance models, pecuniary externalities such as fire sales lead to overinvestment in … illiquid assets or underprovision of liquidity. We investigate whether imperfect competition (Cournot) improves welfare through … internalizing the externality and find that this is far from guaranteed. In a standard model of liquidity shocks, when liquidity is …

liquidity over incentives. Optimal interventions with commitment call for large, long-term subsidies in excess of what is … required to restore liquidity. …