Arbeitspapier
Banks and Market Liquidity
I study a model of market-liquidity provision by levered intermediaries that, besides operating trading desks, run deposit-taking franchises. Levered intermediaries heightened incentive to absorb risk helps to counteract liquidity-provision frictions that, in an unlevered economy, would lead to price distortions and suppressed levels of asset origination ex ante. However, liquidity provision may also overshoot, leading to unhealthy price bubbles and causing asset origination to become excessive. Capital requirements are no panacea: They can spur risk taking and make bubbles bubblier. Ring fencing of trading activities can be, but is not necessarily, undesirable.
- Sprache
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Englisch
- Erschienen in
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Series: Tinbergen Institute Discussion Paper ; No. 15-020/IV
- Klassifikation
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Wirtschaft
Asset Pricing; Trading Volume; Bond Interest Rates
Information and Market Efficiency; Event Studies; Insider Trading
Banks; Depository Institutions; Micro Finance Institutions; Mortgages
Investment Banking; Venture Capital; Brokerage; Ratings and Ratings Agencies
- Thema
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Market Liquidity
Capital Requirements
Volcker Rule
Ring Fencing
- Ereignis
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Geistige Schöpfung
- (wer)
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Arping, Stefan
- Ereignis
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Veröffentlichung
- (wer)
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Tinbergen Institute
- (wo)
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Amsterdam and Rotterdam
- (wann)
-
2015
- Handle
- Letzte Aktualisierung
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20.09.2024, 08:21 MESZ
Datenpartner
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.
Objekttyp
- Arbeitspapier
Beteiligte
- Arping, Stefan
- Tinbergen Institute
Entstanden
- 2015