of idiosyncratic liquidity shocks - arising from deposits outflow at the bank level - and of the aggregate liquidity … during idiosyncratic liquidity shocks, while central bank liquidity contributes to smooth the impact of aggregate liquidity …

money. However, there are limits. How negative can central bank equity be before fiat money loses credibility? We address … this question using a global games approach motivated by the fall of the Bank of Amsterdam (1609–1820). We solve for the … fiscal support and central bank capital in sustaining trust in fiat money …