To avoid illiquidity spillovers and basis risk in swaps, interbank lenders are especially cautious about whether interbank borrowers can meet their claims. This paper is about examining whether the incentive of interbank lenders to penalize risky borrowers can reduce the liquidity risk-taking of...

This paper is about investigating how different bank liquidity creation activities affect housing markets. Using data of 401 metropolitan statistical areas/divisions (MSAs/MSADs) of the US between 1990 and 2018, we show that not all bank liquidity creation activities boost housing markets. In...