We propose and test a new channel that links funding liquidity risk and interest rates in short-term funding markets …. Borrowers with high liquidity risk are willing to pay a markup to lock in their funding, independent of risk premiums demanded … borrowers' funding liquidity risk that lead to systematic and persistent heterogeneity in funding costs. Our results have …

number of occasionally binding constraints. The interactions between these constraints - in particular leverage and liquidity …. If the liquidity constraint is very tight, the leverage constraint may turn slack. In this case, there are large declines …

We analyze the impact of financial crises and monetary policy on the supply of wholesale funding liquidity, and also on … on interbank access and volume is stronger than on spreads. Liquidity supply restrictions are exacerbated for cross … price dispersion substantially decreases when the Eurosystem promises unlimited access to liquidity at a fixed price in …

second channel. The policy rates may influence bank liquidity holding and thus the chances that interbank lending occurs. To … address both channels, bank liquidity holding is endogenous in the presented model. The results show that liquidity is not … banks expect interbank lending to be sufficiently likely and profitable, a smooth liquidity transfer at the interbank market …

and the central bank's liquidity support measures following the Covid-19 pandemic. The liquidity measures enabled banks to … fulfil their liquidity needs primarily through participation in extraordinary liquidity auctions. The distribution of central … bank reserves across banks did not change due to these measures, but interbank trading fell sharply. Ample liquidity …

provide more secured loans to replace unsecured lending, which is not consistent with speculative or precautionary liquidity …