Central clearing counterparties (CCPs) manage counterparty risk by requiring clearing members to post margins. This paper explores the role of margins as "canaries in the coal mine:" By inducing defaults of fragile counterparties before contract maturity, margin calls enable CCPs to transfer...

Central banks around the world routinely engage in asset purchases in secondary markets as part of implementing monetary policy or enhancing market liquidity, but the effects of such interventions are not yet fully understood. We develop a multi-asset general equilibrium model in which the...

We build on recent developments in the theory of money and liquidity to provide a qualitative and quantitative explanation for the well-known TIPS illiquidity vis-'a-vis non-inflation-protected Treasuries. Our model does not assume exogenous differences between the markets where the two assets...

I suggest a new channel through which central bank asset purchase programs could have effects on asset prices: The outside option channel. After the global financial crisis, central banks have widened the variety of assets they can purchase. Secondary markets for the majority of the newly...

This paper evaluates the salient forces behind a dealer-intermediary's decision to move a bilateral repo transaction with a customer into central clearing. We provide evidence that dealers turn to sponsored repo on occasions when balance sheet space is scarce, such as when there is a large...

Financial markets are seen as one of the most important markets in economic terms. The activities of investors in the financial markets consist in predicting how best to invest the accumulated capital, using all kinds of analyzes and forecasts. In the literature on the subject, apart from...

The existing literature on over-the-counter markets has documented an increase in the cost of immediate intermediation in the last decade, associated with a shift from principal towards agency trading. This paper argues that the estimates of transaction costs are subject to a composition effect...

More central dealers earn a premium over peripheral dealers in many types of markets. Possible explanations involve bargaining power, compensation for supplying liquidity, and faster execution speed. We investigate the sources of this premium in the over-the-counter market for corporate bonds....

Building on recent work in monetary theory and finance, we develop a framework where money serves a double liquidity role, namely, it serves as a medium of exchange in goods markets as well as asset markets. We argue that studying such a framework is not only more empirically relevant, but also...

This paper defines a variety of game theoretic solution concepts in the language of soft set theory. We begin by defining the Nash equilibrium in pure strategies. We assume that the gains of the players are totally ordered and non-desirable alternatives are absent. Moreover, we introduce the...