The purpose of this paper is to make a comparative analysis of modern gross and net payment systems, emphasizing the implications of the availability of intraday liquidity in the former, and of collateral requirements in the latter. In contrast to previous models, an economy with two assets is...

We provide a model that links an asset's market liquidity - i.e., the ease with which it is traded - and traders' funding liquidity - i.e., the ease with which they can obtain funding. Traders provide market liquidity, and their ability to do so depends on their availability of funding....

Bank liquidity is a crucial determinant of the severity of banking crises. In this paper, we consider the effect of fire sales and foreign entry on banks' ex ante choice of liquid asset holdings, and the ex post resolution of crises. In a setting with limited pledgeability of risky cash flows...