We develop a tractable model of banks' liquidity management with an over‐the‐counter
interbank market to study the credit channel of monetary policy. Deposits circulate randomly …

The repo market has been viewed as a potential source of financial instability since the 2007
to 2009 financial crisis, based in part on findings that margins increased sharply in a …

We develop a model of the market for federal funds that explicitly accounts for its two
distinctive features: banks have to search for a suitable counterparty, and once they meet …

This paper constructs a liquidity mismatch index (LMI) to gauge the mismatch between the
market liquidity of assets and the funding liquidity of liabilities, for 2,882 bank holding …

We study the design of interventions to stabilize financial markets plagued by adverse
selection. Our contribution is to analyze the information revealed by participation decisions …

Liquidity creation is a core function of banks and an economic service of substantial
importance to the economy. This chapter reviews and synthesizes the theoretical and …

Extreme disruptions in the interbank market severely hampered the broader financial system
during the 2007–08 financial crisis. We use Fedwire data to estimate fed funds trades and …

The design of lender-of-last-resort interventions can exacerbate the bank-sovereign nexus.
During sovereign crises, central bank provision of long-term liquidity incentivizes banks to …

We provide empirical evidence for the existence, magnitude, and economic cost of stigma
associated with banks borrowing from the Federal Reserve's Discount Window (DW) during …

Timothy Geithner's memoir of the financial crisis of 2007–08—Stress Test: Reflections on
Financial Crises—is an important historical document offering details of how policies were …