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this natural experiment to evaluate the consequences of bail out expectations for bank behavior using a difference in …
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I study rollover risk in the wholesale funding market when intermediaries can hold liquidity ex ante and are subject to fire sales ex post. Precautionary liquidity restores multiple equilibria in a global rollover game. An intermediate liquidity level supports both the usual run equilibrium and...
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We present a simple model to study the risk sensitivity of capital regulation. A banker funds investment with uninsured … banks attract cheaper deposit funding and require less capital. With a noisy signal, risk-sensitive capital regulation can …
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