market liquidity increases with the level of intermediary capital. We also characterize conditions under which intermediaries …We present a model of financial market liquidity provided by financially constrained intermediaries. We show that …

This paper identifies a precautionary banking liquidity shock via a set of sign, zero and forecast variance … financial intermediation with credit and liquidity frictions. The precautionary liquidity shock is shown to work through two …

We study the interplay of capital and liquidity regulation in a general equilibrium setting by focusing on future … default coexist, and bank default is a self-fulfilling prophecy. Capital and liquidity regulation can prevent bank default and … liquidity regulation. Adding liquidity regulation to optimal capital regulation is redundant. …

macroeconomic risk factor. Overall our findings lend support to a theory of banking that involves leverage stacks, i …