decreasing their leverage which in turn amplifies the adverse selection problem in asset markets. In the extreme case, this leads …' long-term leverage choices and an "interim" inefficiency because it distorts agents' short-term liquidity management. I …

amount of collateral assets accepted, (ii) the level of leverage and (iii) the level of trust and confidence. As credit … financial system. As trust began to recede, so did leverage and the amount of assets accepted as collateral, leading to a …

-ante leverage and insurance decisions are associated with aggregate demand externalities. The competitive equilibrium allocation is … policy in addressing excessive leverage, and it can even have the unintended consequence of increasing leverage. …

This paper proposes a positive theory of the links between banks' capitalisation and their liquidity risk taking, the …

by curbing risk-taking incentives, the higher the leverage the bank is permitted to take on. Consequently, the risk …