Freixas, Xavier; Martin, Antoine; Skeie, David - Department of Economics and Business, Universitat … - 2010
uncertainty regarding their liquidity needs. This paper studies the efficiency of the interbank lending market in allocating funds …. We consider two different types of liquidity shocks leading to different implications for optimal policy by the central … bank. We show that, when confronted with a distributional liquidity-shock crisis that causes a large disparity in the …