clearinghouse could fail, requiring a bailout. This Article's observation that clearinghouses engage in liquidity partitioning … answers both. Liquidity partitioning means that when one of its member firms becomes bankrupt, a clearinghouse keeps a portion …

' funding liquidity and solvency. Both asset liquidity and central bank haircuts are modelled as power functions within the unit … interval. Funding stability is captured as strategic bank run game in pure strategies between depositors. Asset liquidity, the … bank collateral and why a sudden non-anticipated reduction of asset liquidity, or a tightening of the collateral framework …

Liquidity is a key resource that banks have to manage on a daily basis. Large banking groups face the question of how … to optimally allocate and generate liquidity: in a central liquidity hub or in many decentralized branches across … show that volatility is a key driver of the degree of (de-)centralization. As expected, in a deterministic setup liquidity …

We examine how banks' cross-border lending reacts to changes in liquidity regulation using a new dataset on Individual … Liquidity Guidance (ILG), which was enacted in the UK from 2000 to 2015 and is similar to the Basel III Liquidity Coverage Ratio …. A one percentage point increase in liquidity requirements to total assets reduces UK resident banks' cross …

We develop a model in which margin procyclicality and the propensity for liquidity hoarding interact to generate a … systemic liquidity crisis. In this model, banks lend and borrow in the interbank market to mitigate liquidity risk and trade … procyclicality in the derivatives market can spillover to the interbank market leading to systemic liquidity risk. Interconnectedness …

liquidity. To this end, we develop an environment where banks offer insurance to their depositors against both idiosyncratic and … aggregate real uncertainty, by holding a portfolio of liquidity and productive illiquid assets. Moreover, banks' asset … sufficiently low and the depositors are sufficiently risk averse, the banks first employ liquidity and then liquidate the …

This paper aims to evaluate the relationship between capital and liquidity following the implementation of the Basel … transformation risk, which could result in excessive constraints on bank liquidity creation, thereby negatively affecting economic … liquidity creation as capital increases; and when liquidity creation increases, banks reduce capital ratios. Our results …

We consider the liquidity shock banks experienced following the collapse of the asset-backed commercial paper market in … the fall of 2007 to investigate whether banks' liquidity condition affect their ability to provide liquidity to … that liquidity shock passed a larger portion of their borrowing costs onto corporations seeking access to liquidity in the …

We investigate a model of liquidity sources that incorporates a general equilibrium feature of liquidity: when banks … hold more liquidity, other sectors of the economy hold less of it and will consequently supply less in times of crisis. The … private allocation of liquidity is inefficient and optimal liquidity regulation depends on the source of liquidity to which it …