The euro area overnight interbank market is best described as a network of over-the-counter lending relationships. We … study liquidity reallocation in this interbank network using a novel dataset of all interbank loans settled between European …

network. We first provide a characterization of the unique equilibrium of banks' liquidity holdings for any network of credit … lines. Then, we endogenize the network and show that every equilibrium network is a complete coreperiphery graph. Central … accounting for banks' endogenous linking decisions, a narrower corridor may lead to a sparser interbank network with higher …