Banks individually optimize their liquidity risk management, often neglecting the externalities generated by their choices on the overall risk of the financial system. This is the main argument to support the regulation of liquidity risk. However, banks may have incentives to optimize their...

"This volume focuses on the state's role in managing the fall-out from the global economic and financial crisis since 2008. For a brief moment, roughly from 2008-2010, governments and central banks appeared to borrow from Keynes to save the global economy. The contributors, however, take the...