central bank's reaction to liquidity stress gives banks incentives to invest in excessive liquidity transformation, triggering …

towards a broader market-based financing of financial assets. As a consequence, regulated banks increasingly focus on coping … the financial system, i.e. to shadow banks highly relying on securitization and repos. Unfortunately, economic history has … unilateral inclusion of shadow banks into the regulatory framework, i.e. without access to central bank liquidity, has negative …

central bank's reaction to liquidity stress gives banks incentives to invest in excessive liquidity transformation, triggering …

banks play complex, long-horizon games and face more than one tradeoff. We account for these issues in a simple infinite …, independent central banks cannot in general attain both low inflation and financial stability …