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 …

disrupting the liquidity or stability of mortgage secondary markets. In the process, the programs have created a new financial … market for pricing and trading mortgage credit risk, which has grown in size and liquidity over time. The CRT programs …

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 discusses liquidity regulation when short-term funding enables credit growth but generates negative systemic … containing risk and preserving credit quality, while quantity-based fundingratios are distorsionary. Liquidity buffers are either … overconfidence), excess credit and liquidity risk are best controlled with net fundingratios. Taxes on short-term funding emerge …

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 …

as to provide liquidity and risk-sharing services to the real economy. Our modifications create wedges in the asset and … joint implementation of a capital and a liquidity regulation …

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 …

banking system to aggregate liquidity shocks? And what are the implications, if any, for banking regulation? To answer these … questions, I study a Diamond-Dybvig environment, where banks hedge against aggregate liquidity risk in the interbank market or … contract, and default in equilibrium only when facing systemic liquidity risk. In this case, the allocation at default is …