The interplay between liquidity and credit risks in the interbank market is analyzed. Banks are hit by idiosyncratic … random liquidity shocks. The market may also be hit by a bad news at a future date, implying the insolvency of some … possible contingency, banks currently long of liquidity ask a liquidity premium for lending beyond a short maturity, as a …

This paper proposes a semi-structural approach to identifying excessive household credit developments. Using an … overlapping generations model, a normative trend level for the real household credit stock is derived that depends on four …-aged cohort, and institutional quality. Semi-structural household credit gaps are obtained as deviations of the real household …

Periods of excessive credit growth can imply emergence of systemic financial stress which may result in financial … crisis causing severe losses in the real economy. The base indicators of overheatedness in the credit markets are the … expansion of the credit-to-GDP ratio and its deviation from its long-term trend, the credit-to-GDP gap. When calculating the …

liquidity hoarding. In the model, funds are channeled through several financial intermediaries (banks) until they are finally …

This paper studies how global banks transmit liquidity shocks via their internal capital markets. The unexpected access … as our liquidity shock. Using microdata on all affiliates abroad, we test whether affiliates located outside the US … actively managed internal capital markets and the increased centralization of global banks' liquidity management at the …

reinforce each other to withdraw interbank lending. Banks' individually precautionary liquidity hoarding strategies are …-wide liquidity crunches, as if the interactions are centralized. Local insolvency shocks trigger the interbank run if the network is …

components of bank balance sheets and a decoupling of bank assets from deposits since the mid-1980s, marking a shift from credit … contraction in credit and to liquidity spirals. Subsequent measures by policymakers can be interpreted as attempts to avoid …We identify the origin of the contradicting perspectives on credit creation offered by Austrian, Mainstream and Post …

We show that loan origination time is key for bank lending standards, cycles, defaults and failures. We exploit the … credit register from Spain, with the time of a loan application and its granting. When VIX is lower (booms), banks shorten … loan origination time, especially to riskier firms. Bank incentives (capital and competition), capacity constraints, and …

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