' long-term leverage choices and an "interim" inefficiency because it distorts agents' short-term liquidity management. I … derive important implications for central bank policy. …

to be necessary. -- Crisis response ; Federal Reserve ; counterparty credit risk ; liquidity risk ; limits to arbitrage … aggressive use of both traditional monetary policy instruments and innovative tools in an effort to provide liquidity. In this … particular, balance sheet constraints and counterparty credit risk. The empirical evidence supports the Fed’s views on the …

vulnerabilities of short-term credit markets and the role of central banks as back-stop liquidity providers to financial markets. The … Federal Reserve's response to financial disruptions in the United States importantly included creating liquidity facilities … interventions — the Asset-Backed Commercial Paper Money Market Mutual Fund Liquidity Facility. Our findings indicate that this …

policy rate. A looser central bank collateral policy can reduce the spread, alleviate the credit crunch and increase output …Should central banks lend against low quality collateral? We characterize efficient central bank collateral policy in a … model where a bank borrows from the interbank market or the central bank. Collateral has favorable incentive effects but is …

both traditional monetary policy instruments, as well as innovative tools to provide liquidity. In this paper, the Fed … the primacy of liquidity constraints in the earlier stages of the crisis and the increased prominence of counterparty … credit risk as the crisis evolved in 2008. I conclude that an understanding of the prevailing risk environment is necessary …

This paper uses a natural experiment to study the impact of a loan supply shock on a Hungarian matched bank … affected via their external funding and positions on the swap market. The existence of firms with multiple bank links is …

, holding intermediaries' debt as cash. This paper shows that intermediaries' liquidity creation stimulates growth -- firms hold …. Introducing government debt as a competing source of liquidity is a double-edged sword: firms hold more liquidity in every state … of the world, but by squeezing intermediaries' profits and amplifying their leverage cycle, public liquidity increases …

In this paper we introduce two measures, the Systemic Liquidity Buffer (SLB) and the Systemic Liquidity Shortfall (SLS …) to assess liquidity in the banking system. The SLB takes an aggregated perspective on liquidity risks in the banking … system. In contrast, the SLS focusses on the problematic banks which suffer a liquidity shortfall. These measures provide an …

results also show that after accounting for financing risks, credit risks, market power and bank business model, our empirical …This paper studies bank loan pricing in the euro area over the period October 2008 to October 2014. This period was … characterised by market fragmentation and extended liquidity provision by the ECB. For our analysis we develop a theoretical …