Deleveraging has two components--shrinking of balance sheets due to increased haircuts/shedding of assets, and the reduction in the interconnectedness of the financial system. We focus on the second aspect and show that post-Lehman there has been a significant decline in the interconnectedness...

I show that the repo specialness of sovereign bonds can magnify the transmission of central bank quantitative easing into the real economy. Investors who cannot take advantage of the repo specialness of government bonds substitute for government bonds with riskier assets, such as corporate...

This paper explores what history can tell us about the interactions between macroprudential and monetary policy. Based on numerous historical documents, we show that liquidity ratios similar to the Liquidity Coverage Ratio (LCR) were commonly used as monetary policy tools by central banks...