reserve holdings. Normally, central bank balance sheet expansion will enhance the net future availability of liquidity to the … system. However, in episodes of stress when a large fraction of claims on liquidity are exercised, the demand for liquidity … may hoard reserves to bolster their own prospects, contributing significantly to liquidity shortages. Therefore, because …

reserve holdings. Normally, central bank balance sheet expansion will enhance the net future availability of liquidity to the … system. However, in episodes of stress when a large fraction of claims on liquidity are exercised, the demand for liquidity … may hoard reserves to bolster their own prospects, contributing significantly to liquidity shortages. Therefore, because …

during quantitative tightening starting in 2017, there was no commensurate shrinkage of these claims on liquidity …. Consequently, the past expansion of the Fed’s balance sheet left the financial sector more sensitive to potential liquidity shocks … when the Fed started shrinking it, necessitating Fed liquidity provision in September 2019 and again in March 2020. If the …

We study liquidity transfers between banks through the interbank borrowing and asset sale markets when, (i) surplus …) compared to outside markets, or is prepared to extend potentially loss-making loans. The public provision of liquidity to banks …, in fact its mere credibility, can thus improve the private allocation of liquidity among banks. This rationale for …

' provision of liquidity insurance in the form of credit lines, their significance in managing corporate liquidity, and the …