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When liquidity chasing banks is high, loan officers (or risk-takers) inside banks expect future losses to be readily … Banks should "lean against bank liquidity." In particular, Central Banks should adopt a contractionary monetary policy in … times of excessive bank liquidity …
Persistent link: https://www.econbiz.de/10013108777
provided liquidity against a range of assets during 2008-09. Dealers with lower equity returns and greater leverage prior to … liquidity in explaining dealer behavior. The results suggest that both financial performance and balance sheet liquidity play a …
Persistent link: https://www.econbiz.de/10010404154
We study the interbank lending and asset sales markets in which banks with surplus liquidity have market power …
Persistent link: https://www.econbiz.de/10013128127
We investigate the transmission of central bank liquidity to bank deposits and loan spreads in Europe over the period … bank liquidity does not translate into lower loan spreads for high-risk banks for maturities beyond one year, even as it …
Persistent link: https://www.econbiz.de/10012840478
We investigate the transmission of central bank liquidity to bank deposits and loan spreads in Europe over the January … liquidity does not translate into lower loan spreads for high-risk banks, even as it lowers deposit rates for both high-risk and …
Persistent link: https://www.econbiz.de/10012889089
We investigate the transmission of central bank liquidity to bank deposits and loan spreads in Europe over the period … bank liquidity does not translate into lower loan spreads for high-risk banks for maturities beyond one year, even as it …
Persistent link: https://www.econbiz.de/10012903825
Persistent link: https://www.econbiz.de/10011714997
In summer 2011, elevated sovereign risk in Eurozone peripheral countries increased the solvency risk of Eurozone banks … public funds to increase their exposure to risky domestic debt, so that when solvency risk in the Eurozone worsened the run … of private short-term investors from Eurozone banks intensified. (ii) In contrast, ECB’s announcement of being a …
Persistent link: https://www.econbiz.de/10011436391
We document the mechanism through which the risk of fire sales in the sovereign bond market contributed to the effectiveness of two major central bank interventions designed to restore financial stability during the European sovereign debt crisis. As a lender of last resort via the long-term...
Persistent link: https://www.econbiz.de/10011899821
This paper studies a model in which a low monetary policy rate lowers the cost of capital for entrepreneurs, potentially spurring productive investment. Low interest rates, however, also induce entrepreneurs to lever up so as to increase payouts to equity. Whereas such leveraged payouts...
Persistent link: https://www.econbiz.de/10012846842