compares the Federal Reserve’s actions with the literature on optimal policy in a liquidity trap. This comparison suggests that … policy has been in the direction indicated by theory, but it has not gone far enough. To interpret quantitative policy, the …

We study the liquidity demand of large settlement (first-tier) banks in the UK and its effect on the Sterling Money … Markets before and during the sub-prime crisis of 2007-08. Liquidity holdings of large settlement banks experienced on average … banks to park liquidity at the central bank rather than lend in the market. We show that following this structural break …

We analyze the impact of non-compliance with a requirement similar to the Basel III Liquidity Coverage Ratio and its … non-compliance with a liquidity requirement causes banks to pay and charge higher interest rates as well as to increase … be affected by the requirement. While non-compliance with a liquidity requirement does not seem to directly affect …

to liquidity assistance as a solution to forbearance. Faced with a bank that chooses capital and liquidity, the … institution providing liquidity assistance can commit to a mixed strategy: never bailing out is too costly and therefore not … credible, while always bailing out causes moral hazard. In equilibrium, the bank chooses above minimum capital and liquidity …

global liquidity creation by key central banks and, second, an ex-ante global saving glut, brought about by the entry of a … England’s liquidity management, regulatory failure of the FSA, an inadequate deposit insurance arrangement and deficient …