Liquidity and crises

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Title:

Author:

Allen, Franklin, 1956-.

ISBN:

9780195390704

9780195390711

Publication Information:

New York : Oxford University Press, 2011.

Physical Description:

x, 707 s.

Contents:

An introduction to liquidity and crises / Franklin Allen ... [et al.]. Preference shocks, liquidity, and central bank policy / Sudipto Bhattacharya and Douglas Gale -- Endogenous liquidity in asset markets / Andrea L. Eisfeldt -- Financial intermediaries and markets / Franklin Allen and Douglas Gale -- Financial fragility, liquidity, and asset prices / Franklin Allen and Douglas Gale -- Interbank market integration under asymmetric information / Xavier Freixas and Cornelia Holthausen -- Banks as monitors of other banks: evidence from the overnight federal funds market / Craig H. Furfine -- Private and public supply of liquidity / Bengt Holmstrèom and Jean Tirole -- Liquidity, efficiency, and bank bailouts / Gary Gorton and Lixin Huang -- Asset market linkages in crisis periods / Philipp Hartmann, Stefan Straetmans, and Casper de Vries -- Strategic complementarities and the twin crises / Itay Goldstein -- Inefficient foreign borrowing: a dual- and common-agency perspective / Jean Tirole -- Exchange rate volatility and the credit channel in emerging markets: a vertical perspective / Ricardo Caballero and Arvind Krishnamurthy.

Subject Term:

Liquidity (Economics).

Financial crises.

Added Author:

Allen, Franklin, 1956-.

Copies:

Available:*

Library	Material Type	Item Barcode	Shelf Number	Copy	Status
Searching... 1:IIEMSA	1:GEN-BOOK	33168025564218	338.5 42 A425L 2011	1	Searching... Unknown

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Summary

Financial crises have been pervasive for many years. Their frequency in recent decades has been double that of the Bretton Woods Period (1945-1971) and the Gold Standard Era (1880-1993), comparable only to the period during the Great Depression. Nevertheless, the financial crisis that started in the summer of 2007 came as a great surprise to most people. What initially was seen as difficulties in the U.S. subprime mortgage market, rapidly escalated and spilled over first to financial markets and then to the real economy. The crisis changed the financial landscape worldwide and its full costs are yet to be evaluated.

One important reason for the global impact of the 2007-2009 financial crisis was massive illiquidity in combination with an extreme exposure of many financial institutions to liquidity needs and market conditions. As a consequence, many financial instruments could not be traded anymore, investors ran on a variety of financial institutions particularly in wholesale markets, financial institutions and industrial firms started to sell assets at fire sale prices to raise cash, and central banks all over the world injected huge amounts of liquidity into financial systems.
But what is liquidity and why is it so important for firms and financial institutions to command enough liquidity? This book brings together classic articles and recent contributions to this important field of research. It provides comprehensive coverage of the role of liquidity in financial crises and is divided into five parts: (i) liquidity and interbank markets; (ii) the public provision of liquidity and regulation; (iii) money, liquidity and asset prices; (iv) contagion effects; (v) financial crises and currency crises.