We model systemic risk in an interbank market. Banks face liquidity needs as consumers are uncertain about where they … need to consume. Interbank credit lines allow banks to cope with these liquidity shocks while reducing the cost of …

uncertainty regarding their liquidity needs. This paper studies the efficiency of the interbank lending market in allocating funds …. We consider two diferent types of liquidity shocks leading to diferent implications for optimal policy by the central … bank. We show that, when confronted with a distributional liquidity-shock crisis that causes a large disparity in the …

During the last decades a consensus has emerged that it is impossible to disentangle liquidity shocks from solvency …

theory of banking. We consider the implications of the two accounting methods in an overlapping generations environment. As …

theory of banking. Weconsider the implications of the two accounting methods in an overlapping generations environment. As …

cope with liquidity shocks by borrowing or by liquidating assets, we study the scope for international interbank market … reduces the liquidity imbalances and thus the gains from unsecured market integration. The introduction of other transnational …;too-big-to-failquot; banks may reduce cross country interest spreads and provide more insurance against country wide liquidity shocks. Still …