aggregate liquidity shocks and firms against losing liquidity at will of banks. During aggregate liquidity shocks, banks need to … ration liquidity, and covenants allow banks to revoke credit lines if firms' accounting-performance measures fall below a … threshold. Thereby, accounting covenants constrain banks' discretion in rationing liquidity in a systematic way. Transitory …

In this paper we introduce two measures, the Systemic Liquidity Buffer (SLB) and the Systemic Liquidity Shortfall (SLS …) to assess liquidity in the banking system. The SLB takes an aggregated perspective on liquidity risks in the banking … system. In contrast, the SLS focusses on the problematic banks which suffer a liquidity shortfall. These measures provide an …

I revisit the Diamond-Dybvig model of liquidity insurance in the presence of hidden trades. The key result is that in … this environment deposit-taking banks are not necessary for the efficient provision of liquidity. Mutual funds are … constrained efficient when supplemented with the same government liquidity regulation that is required to make a banking system …

illiquid assets or underprovision of liquidity. We investigate whether imperfect competition (Cournot) improves welfare through … internalizing the externality and find that this is far from guaranteed. In a standard model of liquidity shocks, when liquidity is … sufficiently scarce, Cournot competition leads to even less liquidity than the Walrasian equilibrium. In a standard model of …

-shares of the same fund during the unprecedented liquidity crisis in March 2020. For an average bond or equity mutual fund … collective "dash for cash" by consumers and firms in need of liquidity at the outset of the COVID-19 pandemic was not the source …

We study the role of captive finance in the car loan market when manufacturers' liquidity demand increases. Using a new … multi-country dataset on securitized car loans, we show that captive lending enables a liquidity constrained integrated … exploit quasi-exogenous variation in manufacturers' liquidity cost and need following the Volkswagen emissions scandal to …

I study how liquidity management affects fragility, or vulnerability to fund flows, in mutual funds and their … underlying assets. Using the SEC Rule on mutual fund liquidity risk management in 2016 as an exogenous shock, I show that mutual … stabilized fund flows and flow-performance sensitivity. Overall, liquidity management could be costly for investors …

Using a supplier-client matched sample, we study the effect of the 2007-2008 financial crisis on between-firm liquidity … provision. Consistent with a causal effect of a negative shock to bank credit, we find that firms with high pre-crisis liquidity … consistent with firms providing liquidity insurance to their clients when bank credit is scarce and provide an important …

explains the link between the liquidity premium and spreads. We present a theory of endogenous bank fragility arising from a …. This drives up both credit spreads and the liquidity premium. By mitigating the coordination friction, expansions of public … liquidity reduce spreads and boost the economy. Empirically, we identify high-frequency exogenous variation in liquidity by …