This paper explains the emergence of liquidity traps in the aftermath of large-scale financial crises, as happened in … long time. -- liquidity trap ; financial crisis ; rare disasters ; equity capital ; leverage ; bankruptcy risk …

This paper studies how liquidity shocks that affect financial intermediaries are propagated to the real economy. Loans … financial intermediaries face tight borrowing constraints (i.e. liquidity risk premium). This liquidity risk faced by financial …

The crisis of 2007-2009 has shown that financial market turbulence can lead to huge funding liquidity problems for … liquidity management are modeled in a panel Vector Autoregressive (p-VAR) framework. Orthogonalized impulse responses reveal … that banks respond to a negative funding liquidity shock in a number of ways. First, banks reduce lending, especially …

This paper presents a macro stress-testing model for liquidity risks of banks, incorporating the proposed Basel III … liquidity regulation, unconventional monetary policy and credit supply effects. First and second round (feedback) effects of … shocks are simulated by a Monte Carlo approach. Banks react according to the Basel III standards, endogenising liquidity risk …

outcomes during systemic liquidity crises. I investigate if this is true for East Asian firms that had raised equity and debt … capital abroad, had better crisis and post-crisis period liquidity and other operational outcomes than otherwise comparable … constrained during and after the crisis. To highlight the liquidity constraints channel, I show that crisis and post-crisis period …

Using a supplier-client matched sample, we study the effect of the 2007-2008 financial crisis on between-firm liquidity … provision. Consistent with a causal effect of a negative shock to bank credit, we find that firms with high pre-crisis liquidity … consistent with firms providing liquidity insurance to their clients when bank credit is scarce and provide an important …