in markets with less liquidity. Heterogeneous beliefs imply agents do better than break-even from trade in expectation. I … and relative bargaining power. The model suggests central clearing counterparties will have more impact on prices in …

Can central counterparty (CCP) clearing control counterparty risk in the presence of risk taking that can aggravate … such risk? When counterparty risk is not observable, I show that central clearing leads to higher collateral requirements … market liquidity and worsens incentives causing a feedback effect that amplifies collateral costs. …

correspondent bank. Settling payments directly on the system imposes liquidity costs which depend on the maximum liquidity overdraft … recoup liquidity costs and to extract a profit. We specify a protocol whereby one bank in each period can revisit its choice …-correspondent network. We simulate this protocol, observing the emergence of different network structures. The liquidity pricing regime …