In June 2022, the Federal Reserve started reducing the size of its balance sheet, which had expanded to just under $9 trillion in response to the COVID-19 pandemic. However, whereas banks' reserves at the Federal Reserve have decreased, the investment of money market funds (MMFs) at the Federal...

This is the Appendix of the paper "Public Liquidity and Financial Crises", "https://ssrn.com/abstract=3175101" https://ssrn.com/abstract=3175101.In this appendix, I show the numerical methods for solving the general equilibrium model that features infrequent financial crises and the private...

This paper presents a general equilibrium, monetary model of bank runs to study monetary injections during financial crises. When the probability of runs is positive, depositors increase money demand and reduce deposits; at the economy-wide level, the velocity of money drops and deflation...

I examine the effect of marketable security holdings on monetary policy when those securities are classified under SFAS 115. Prior research has shown that loan growth is negatively related to monetary contractions and that marketable security holdings mitigate that negative relationship. Those...

The main focus of the paper is on the behavior of central banks, which during the crisis have radically changed the traditional tools of interventions taking many measures generally termed “unconventional monetary policies”. Four central banks are taken into consideration: Federal Reserve...

The central bank's balance sheet has become the main instrument of monetary policy in the aftermath of the GFC and the COVID-19 health crisis. Hence, the aim of this paper is to analyze changes in the balance sheets' sizes and channels of base money creation in groups of countries, taking note...

One aim of post-crisis monetary policy has been to ease credit conditions for borrowers by unlocking bank lending. We find that bank equity is an important determinant of both the bank's funding cost and its lending growth. In a cross-country bank-level study, we find that a 1 percentage point...

Nineteenth-century British economists Henry Thornton and Walter Bagehot established the classical rules of behavior for a central bank, acting as lender of last resort, seeking to avert panics and crises: Lend freely (to temporarily illiquid but solvent borrowers only) against the security of...

Nineteenth-century British economists Henry Thornton and Walter Bagehot established the classical rules of behavior for a central bank, acting as lender of last resort, seeking to avert panics and crises: Lend freely (to temporarily illiquid but solvent borrowers only) against the security of...