because it reflects special liquidity benefits of bank debt. Even aside from neglecting the systemic damage to the economy … laissez-faire are inefficient and involve excessive borrowing, with default risks that jeopardize the purported liquidity …

it reflects special liquidity benefits of bank debt. Even aside from neglecting the systemic damage to the economy that …-faire are inefficient and involve excessive borrowing, with default risks that jeopardize the purported liquidity benefits …

decrease a bank's incentive to take risk with its remaining ineligible assets. A greater capacity to respond to liquidity … illiquidity disadvantages of holding risky assets. We then empirically estimate the effect of two liquidity regulations on bank … stress increases the potential profits a bank would put at stake by making risky investments, but it also mitigates the …

default coexist, and bank default is a self-fulfilling prophecy. Capital and liquidity regulation can prevent bank default and …We study the interplay of capital and liquidity regulation in a general equilibrium setting by focusing on future … return prospects on the long-term investment turn out to be bad. For moderate return risk, equilibria with and without bank …

This paper analyzes a government's incentives to provide fi nancial assistance to a public bank which is hit by a … liquidity shock. We show that discretionary decisions about emergency liquidity assistance result in either excessively small or … excessively large liquidity injections in a wide variety of circumstances. Also, adding a lender of last resort does not generally …

Bank liquidity shortages during the global financial crisis of 2007-2009 led to the introduction of liquidity … impact of liquidity regulation on bank lending. As a setting, we use the Netherlands, where a Liquidity Balance Rule (LBR …-in-differences approach, we find that stricter liquidity requirements did not reduce the lending of Dutch banks relative to other banks not …

regulatory liquidity requirements on bank behavior. A multi-stage decision situation allows for considering the interaction … between credit risk and liquidity risk of banks. This interaction is found to make a risk neutral bank behave as if it were … risk averse in an environment where there is no interbank market and liquidity regulation. Introducing a buoyant interbank …

The convention in calculating trading costs in corporate bond markets is to assume that dealers provide liquidity to … provide liquidity in corporate bond markets, and thus, average bid-ask spreads underestimate trading costs that customers … demanding liquidity pay. Compared with periods before the 2008 financial crisis, substantial amounts of liquidity provision have …

introduction of liquidity regulations. These changes were motivated in part by the argument that central bank lending entails …During the 2007-09 financial crisis, there were severe reductions in the liquidity of financial markets, runs on the … Reserve, in its role as lender of last resort (LOLR), injected extraordinary amounts of liquidity. In the aftermath, lawmakers …