A mechanism is proposed that aims to reduce the risk of a banking sector liquidity crisis�which is a quintessentially systemic event and thus the object of macroprudential policy�and moderate the effects of a crisis should one occur. The instrument would give banks more incentive to build up...

Market liquidity is of value to both investors and issuers of securities, and is therefore a crucial factor in asset pricing. For the important asset class of Eurobonds, significant feedback from liquidity to pricing is established, and it is shown that bid-ask spreads (a proxy for market...

Market liquidity is of value to both investors and issuers of securities, and is therefore a crucial factor in asset pricing. For the important asset class of Eurobonds, significant feedback from liquidity to pricing is established, and it is shown that bid-ask spreads (a proxy for market...

A mechanism is proposed that aims to reduce the risk of a banking sector liquidity crisis — which is a quintessentially systemic event and thus the object of macroprudential policy — and moderate the effects of a crisis should one occur. The instrument would give banks more incentive to...