Using financial ETFs from various financial industries, we set out in this study to explore the relationship between funding liquidity and equity liquidity. We measure funding liquidity from the interbank as well as the collateral markets and examine how funding liquidity affects bid-ask spread,...

We explore the effect of funding constraints on the trading costs of VIX futures. With an increase in funding constraints during a crisis (non-crisis) period, we observe a corresponding increase (decrease) in the proportional effective spread, quoted spread, order cost, asymmetric information,...

We examine the effect of quantitative easing on the supply of bank loans and the issuance of corporate debts. During quantitative easing, lending banks demand significantly lower loan spreads, offer longer loan maturities, provide larger loans, and loosen covenants on firms whose long-term bond...