Feng, Xu; Luetkebohmert, Eva; Xiao, Yajun - 2021
deposits in China. We quantify the economic magnitude of the effect of WMPs on banking stability in an equilibrium model … calibrated to Chinese banking sector data. Alternative equilibria emerge, which deviate substantially from the observed banking … to the asset market underlying WMPs can exacerbate banking instability. Moreover, we show that smaller and medium sized …