Central banks repo market operations and liquidity infusions occasion a structural liquidity mismatch in bank balance … sheets and increase the dependence on central bank liquidity. This paper argues for what I term “Circular Monetary Economics …”, an approach to monetary policy that seeks to green and prudentially insulate the design and implementation of liquidity …

the absence of central bank intervention, the incentive of financial intermediaries to free ride on liquidity in good … states may result in excessively low liquidity in bad states. In the prevailing mixed-strategy equilibrium, depositors are … worse off than if banks would coordinate on more liquid investment. It is shown that public provision of liquidity improves …

emerging economy, and those affecting borrowing from foreign lenders. This "dual liquidity" model offers a parsimonious …

emerging economy, and those affecting borrowing from foreign lenders. This 'dual liquidity' model offers a parsimonious …

Traditionally, aggregate liquidity shocks are modelled as exogenous events. Extending our previous work (Cao & Illing …, 2008), this paper analyses the adequate policy response to endogenous systemic liquidity risk. We analyse the feedback … between lender of last resort policy and incentives of private banks, determining the aggregate amount of liquidity available …

Traditionally, aggregate liquidity shocks are modelled as exogenous events. Extending our previous work (Cao & Illing …, 2007), this paper analyses the adequate policy response to endogenous systemic liquidity risk. We analyse the feedback … between lender of last resort policy and incentives of private banks, determining the aggregate amount of liquidity available …