We consider a model in which the threat of bank liquidations by creditors as well as equity-based compensation … incentives both discipline bankers, but with different consequences. Greater use of equity leads to lower ex ante bank liquidity …, whereas greater use of debt leads to a higher probability of inefficient bank liquidation. The bank's privately …

protection selling in CDS, the effect being weaker when sovereign risk is high. Bank and country risk variables are mostly not … building a complete picture and understanding fully the economic drivers of the bank-sovereign nexus of risk …

protection selling in CDS, the effect being weaker when sovereign risk is high. Bank and country risk variables are mostly not … building a complete picture and understanding fully the economic drivers of the bank-sovereign nexus of risk …

, 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 …

instead that NBFI and bank businesses and risks are so interwoven that they are better described as having transformed over … contingent liquidity risk from the provision of credit lines to NBFIs; and (iii) empirical work confirms bank-NBFI linkages …

, eventually, greater reliance on liquidity support from the European Central Bank …

protection selling in CDS, the effect being weaker when sovereign risk is high. Bank and country risk variables are mostly not … building a complete picture and understanding fully the economic drivers of the bank-sovereign nexus of risk. …

This paper was presented at the Federal Reserve Bank of New York conference on Central Bank Liquidity Tools, February …