regulations aimed at reducing counterparty risk and improving liquidity can be ineffcient. Such regulations have a direct positive …

of over-the-counter securities markets. We find that such regulations promote entry of dealers, thus fostering …. General equilibrium effects imply that more competition can distort incentives of all dealers to invest in efficient …

The presence of information asymmetry increases the probability that a potential predator will provide liquidity rather … findings. These results imply that strategic traders are more likely to stabilize markets by providing liquidity when …

I study how liquidity management affects fragility, or vulnerability to fund flows, in mutual funds and their … underlying assets. Using the SEC Rule on mutual fund liquidity risk management in 2016 as an exogenous shock, I show that mutual … stabilized fund flows and flow-performance sensitivity. Overall, liquidity management could be costly for investors …

model in which dealers intermediate trades between clients and provide immediacy, or, market liquidity. Dealers can exert … unobservable effort to improve the chance of intermediating profitably. This moral-hazard friction impairs dealers’ ability to … raise external finance and hence to compete aggressively with each other in providing liquidity. To alleviate the financing …