Arbeitspapier
Do institutions behave rationally in distressed markets?
The authors theoretically analyze the efficiency of liquidity flows in stabilizing distressed markets. Their analysis focuses on the incentives for financial institutions; specifically, they focus on arbitrage profit as an incentive and liquidity risk as a disincentive. The authors show that even with a major negative market shock, a financial institution can increase its market investment if it has sufficient funding liquidity. In addition, their model reveals a positive relationship between funding liquidity and liquidity flows. Thus, a distressed market might stabilize more quickly when financial institutions, acting as liquidity providers, have sufficient funding to bear the market's liquidity risk.
- Sprache
-
Englisch
- Erschienen in
-
Series: Economics Discussion Papers ; No. 2017-103
- Klassifikation
-
Wirtschaft
Information and Market Efficiency; Event Studies; Insider Trading
General Financial Markets: Government Policy and Regulation
Banks; Depository Institutions; Micro Finance Institutions; Mortgages
- Thema
-
market efficiency
arbitrage profit
liquidity risk
flight to quality
distressed market
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Cho, Hoon
Ryu, Doojin
Sung, Sangwook
- Ereignis
-
Veröffentlichung
- (wer)
-
Kiel Institute for the World Economy (IfW)
- (wo)
-
Kiel
- (wann)
-
2017
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:44 MEZ
Datenpartner
Dieses Objekt wird bereitgestellt von:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.
Objekttyp
- Arbeitspapier
Beteiligte
- Cho, Hoon
- Ryu, Doojin
- Sung, Sangwook
- Kiel Institute for the World Economy (IfW)
Entstanden
- 2017
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