Hedgers and a risk-neutral informed trader choose between a broker who takes a position in the asset (a capital broker) and a broker who does not (a discount broker). The capital broker exploits order flow information to mimic informed trades and offset hedgers' trades, reducing informed profits...

Federal Reserve Chairman Ben Bernanke recently discussed central bank actions to support market liquidity and the reasoning behind the Fed's actions to soothe recent strains in short-term funding markets.