different liquidity types, central bank liquidity, funding and market liquidity and their relevant risks. In order to understand … the workings of financial system liquidity, as well as the role of the central bank, we bring together relevant literature … bank liquidity can be important in managing a liquidity crisis, yet it is not a panacea. It can act as an immediate but …

funds and the optimal policy of a central bank in response to liquidity shocks. We show that, when confronted with a … distributional liquidity-shock crisis that causes a large disparity in the liquidity held by different banks, a central bank should … uncertainty regarding their liquidity needs. This paper examines the efficiency of the interbank lending market in allocating …

The theory of liquidity management under uncertainty predicts that, under certain conditions, commercial banks will … standing facilities. This suggests that liquidity effects on the overnight inter-bank rate should be very muted on this day … banks which build-up excess reserves. The empirical analysis suggest that idiosyncratic liquidity uncertainty is much higher …

that due to its size, a large bank receives a more precise signal about the overall liquidity development in the banking … sector. In an upcoming liquidity shortage this large bank can exploit its informational advantage in the spot money market by … rationing liquidity. Using forward contracts, the large bank can credibly commit not to squeeze small banks in the event of a …

assets, the feasibility of secured lending, and welfare implications of the central bank’s collateral framework. As an …

banks to have private information about the risk of their assets. We show how banks’ asset risk affects funding liquidity in … state with adverse selection and elevated rates; and iii) market breakdown with liquidity hoarding. We provide an … of unsecured rates and excess reserves banks hold, as well as the inability of massive liquidity injections by central …

The paper presents a simple model of banking behavior where portfolio, liquidity, and liability management determine … simultaneously the demand and supply of borrowed reserves on the interbank market. As the central bank is one player in this market … bank loans. Comparative static analysis shows how external or monetary policy shocks affect the behavior on the interbank …

. Basel III was a regulatory consequence of the Global Financial Crisis, which is scheduled to impose liquidity requirements … as a prudential measure for commercial banks. Chapter 3 examines whether these liquidity requirements could have an … unintended negative effect on monetary stability. Based on a new dataset of reserve and liquidity requirements, the results show …

liquidity and solvency shocks. Extending the work by Cao & Illing (2009a, b), it is shown that systemic liquidity shortage … extra cost for banking regulation and makes some schemes that are optimal under pure illiquidity risks (such as liquidity …