-shares of the same fund during the unprecedented liquidity crisis in March 2020. For an average bond or equity mutual fund … by time-varying differences in fund performance. Results for equity funds are similar, although they faced substantially … smaller outflows, coupled with much larger declines in performance, compared to bond funds. Our findings suggest that a …

: undiversifiable interest rate risk and shocks to aggregate liquidity demand. Mutual funds are inefficient when the economy faces … undiversifiable interest rate risk. However, if only aggregate liquidity demand is stochastic, mutual funds can implement the social … optimum even when liquidity demand is not directly observed. …

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 …