We examine the effects of collateral provision as a potential channel between funding liquidity tensions and the … scarcity of market liquidity. This channel consists in transferring the credit risk associated with refinancing operations … between financial institutions to market participants that bear new liquidity risk on the market associated with collateral …

Do financial market participants free-ride on liquidity? To address this question, we construct a dynamic general …

financial institutions to market participants. In particular, we analyze liquidity and volatility premia on the French …; in the other, which we dub the unconventional regime, monetary policy operations lead to volatility and liquidity premia …

financial stability. In the model, demand for liquidity takes the form of demand for money to make payments. We show that banks … can provide elastic aggregate liquidity by creating and lending out deposits, which will reduce the need for people to … sell assets and help maintain asset price stability. We also compare two types of liquidity provision mechanisms. The first …

Liquidity plays an important role in explaining how banks determine their allocation of funds. This paper analyses … liquidity in a manner similar to that used to study household need for liquidity, namely, by using a cash-in-advance type model … maintained hypothesis concerning the liquidity premium and default risk premium. This paper confirms the finding that monetary …