Haselmann, Rainer; Kick, Thomas; Singla, Shikhar; Vig, … - 2022
We employ a proprietary transaction-level dataset in Germany to examine how capital requirements affect the liquidity … average trade size. While non-bank affiliated dealers increase their market-making activity, they are unable to bridge this … gap - aggregate liquidity declines. Our results are stronger for banks with a higher capital shortfall, for noninvestment …