This is a survey of the literature on liquidity provision through banks. I first formulate the basic model underlying … provision through banks and markets. Then I turn to liquidity provision on the asset side of banks' balance sheets and conclude … the modern literature on liquidity provision for households and then introduce the more recent literature on liquidity …

adequacy regulations and households' preferences for liquidity. Detailing a dynamic new Keynesian general equilibrium model, in … which households require a (countercyclical) liquidity premium to hold bank capital, we find that the introduction of bank … capital amplifies monetary shocks to the macroeconomy through a liquidity premium effect on the external finance premium. This …