, precipitating a run on their short-term debt. We assess the effectiveness of different European Central Bank (ECB) interventions … potential buyer of last resort via the Outright Monetary Transaction program (OMT) significantly reduced the bank …

of central bank balance sheets involves tradeoffs between monetary policy and financial stability …

, frictions arise in lending due to moral hazard, and assets are bank-specific. Illiquid banks have weak outside options that … allow surplus banks to ration lending, resulting in inefficient asset sales. A central bank can ameliorate this inefficiency …

Banks should "lean against bank liquidity." In particular, Central Banks should adopt a contractionary monetary policy in … times of excessive bank liquidity …

providing liquidity have market power, ii)there are frictions in the lending market due to moral hazard, and(iii)assets are bank …, thereby inducing inefficient sales of bank-specific assets. A central bank can ameliorate this inefficiency by standing ready …

Central bank balance sheet expansion is financed by commercial banks. It involves not just a substitution of liquid … central bank reserves for other assets held by commercial banks, but also a counterpart increase in commercial bank … reserve holdings. Normally, central bank balance sheet expansion will enhance the net future availability of liquidity to the …