confined to project initiation, I find that: (1) when agents expect a liquidity dry-up on such markets, they optimally choose … to self-insure through the hoarding of non-productive but liquid assets; (2) such a response has negative externalities … as it reduces ex-post market participation, which worsens adverse selection and dries up market liquidity; (3) liquidity …

confined to project initiation, I find that: (1) when agents expect a liquidity dry-up on such markets, they optimally choose … to self-insure through the hoarding of non-productive but liquid assets; (2) such a response has negative externalities … as it reduces ex-post market participation, which worsens adverse selection and dries up market liquidity; (3) liquidity …

liquidity tightened after the Lehman collapse but there is no evidence of fire sales in the German banking sector. Instead, we … observe a broad-based flight to liquidity. The European Central Bank's unconventional monetary policy had a strong impact on … banks' trading behavior by inducing shifts towards eligible securities and reducing pressure on market liquidity. This …

We analyze a novel feedback mechanism between market and funding liquidity that causes self-fulfilling liquidity dry … gain by resorting to outside liquidity sources and withhold assets from secondary markets. This leads to adverse selectrion … become mutually reinforcing. We compare different policy measures that can mitigate the risk of inefficient liquidity dry …

We investigate the channel through which fluctuations in the market liquidity of real-sector repo collateral cause … productive capital as repo collateral to fund the margin for their arbitrage positions. A tiny drop in the market liquidity of …), and can easily incur a simultaneous repo run and arbitrage crashes, where liquidity in several markets dry up altogether …