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Malherbe, Frédéric - 2010

confined to project initiation, I find that: (1) when agents expect a liquidity dry-up on such markets, they optimally choose … to self-insure through the hoarding of non-productive but liquid assets; (2) such a response has negative externalities … as it reduces ex-post market participation, which worsens adverse selection and dries up market liquidity; (3) liquidity …

Persistent link: https://www.econbiz.de/10011506705

When shadows grow longer: shadow banking with endogenous entry

Ari, Anil; Darracq Pariès, Matthieu; Kok, Christoffer; … - 2016

collapse then triggers a fire-sale that renders traditional banks vulnerable to "liquidity runs". The prospect of liquidity …

Persistent link: https://www.econbiz.de/10011605988

Shadow banking: Financial intermediation beyond banks

Jokivuolle, Esa (contributor) - 2018

Shadow banking is a broad concept. A possible definition is that it comprises non-bank institutions which undertake bank-like activities. Another characteristic is that the sector is overall less regulated. Therefore there are still shortcomings in systematic collection of information of the sector.

Persistent link: https://www.econbiz.de/10011985212

Market Depth, Leverage, and Speculative Bubbles

Enders, Zeno; Hakenes, Hendrik - 2017

We develop a model of rational bubbles based on leverage and the assumption of an imprecisely known maximum market size. In a bubble, traders push the asset price above its fundamental value in a dynamic way, driven by rational expectations about future price developments. At a previously...

Persistent link: https://www.econbiz.de/10011794145

Market Depth, Leverage, and Speculative Bubbles

Enders, Zeno; Hakenes, Hendrik - 2021

Persistent link: https://www.econbiz.de/10012420380

A dynamic theory of collateral quality and long-term interventions

Lee, Michael Junho; Neuhann, Daniel - 2019

liquidity over incentives. Optimal interventions with commitment call for large, long-term subsidies in excess of what is … required to restore liquidity. …

Persistent link: https://www.econbiz.de/10012144737

Stressed, not frozen: The federal funds market in the financial crisis

Afonso, Gara; Kovner, Anna; Schoar, Antoinette - 2010

particular, we do not find that worse performing banks began hoarding liquidity and indiscriminately reducing their lending. …

Persistent link: https://www.econbiz.de/10010287137

Tackling the volatility paradox: spillover persistence and systemic risk

Kubitza, Christian - 2024

Financial losses can have persistent effects on the financial sy stem. This paper proposes an empirical measure for the duration of these effects, S pillover P ersistence. I d ocument that Spillover Persistence is strongly correlated with financial c onditions; d uring b anking crises, Spillover...

Persistent link: https://www.econbiz.de/10015199543

Private overborrowing under sovereign risk

Arce, Fernando - 2022

This paper proposes a quantitative theory of the interaction between private and public debt in an open economy. Excessive private debt increases the frequency of financial crises. During such crises the government provides fiscal bailouts financed with risky public debt. This response may cause...

Persistent link: https://www.econbiz.de/10013364539

Financial crises and political radicalization: How failing banks paved Hitler’s path to power

Doerr, Sebastian; Gissler, Stefan; Peydró, José-Luis; … - In: The Journal of Finance 77 (2022) 6, pp. 3339-3372

Do financial crises radicalize voters? We study Germany's 1931 banking crisis, collecting new data on bank branches and firm-bank connections. Exploiting cross-sectional variation in precrisis exposure to the bank at the center of the crisis, we show that Nazi votes surged in locations more...

Persistent link: https://www.econbiz.de/10014279951