We develop a model of interbank lending and borrowing with counterparty risk. The model
has two key ingredients. First, liquidity in the banking sector is endogenous, so there is an …

Most research on firm financing studies debt versus equity issuance. We model an
alternative source, non-core asset sales, and identify three new factors that contrast it with …

We study government interventions in markets suffering from adverse selection. Importantly,
asymmetric information prevents both the realization of gains from trade and the production …

In 2007, as American housing markets started to decline, the government-sponsored
enterprises dramatically increased their acquisitions of low FICO and high loan-to-value …

This paper considers the central bank mandate with respect to financial stability and
identifies the links to the functioning of securities markets. It argues that while emergency …

Using detailed transactions‐level data on interbank loans, we examine the efficiency of an
overnight interbank lending market and the bargaining power of its participants. Our analysis …

Using detailed loan transactions-level data we examine the efficiency of an overnight
interbank lending market, and the bargaining power of its participants. Our analysis relies on …

We model intermediaries trading economically coupled assets, each asset in its own overthe-
counter market—eg, secured debt and the underlying collateral. Incentives to provide …

When do sellers benefit from the presence of a strong buyer? In a second price auction with
independent private values and entry costs for buyers, we allow for one buyer to be …

We construct a model that endogenizes both the debt maturity choices of financial
institutions and the liquidity of the asset market in a Rational Expectations Equilibrium. And …