Förster, Daniel; Walther, Martin - In: Credit and Capital Markets – Kredit und Kapital 52 (2019) 2, pp. 213-227
unanticipated insolvency of one bank. Banks that cannot rule out an indirect hit react by selling assets and hoarding liquidity …. While this potentially lowers illiquidity risks, it depresses market liquidity and prices. This leads to a negative … externality by which sales to acquire liquidity simultaneously lead to lower global sale proceeds and thus to a greater number of …