Capital requirements are the cornerstone of modern bank regulation, yet little is known
about their welfare cost. This paper measures this cost and finds that it is surprisingly large. I …

We study a modification of the Diamond and Dybvig (1983) model in which the bank may
hold a liquid asset, some depositors see sunspots that could lead them to run, and all …

The post-crisis liquidity framework improves banking stability by imposing stricter liquidity
requirements. However, consistent bank performance continues to be an essential factor in …

Monetary policy becomes real through financial operations of the central bank with the rest
of the world—and in particular with financial institutions.“Signaling” or “open mouth …

We examine how banks use loan sales to manage liquidity during periods of marketwide
stress and the associated spillovers to market prices. We track the dynamics of loan share …

This paper investigates the costs and benefi ts of liquidity regulation. We find that liquidity
tools are bene ficial but cannot completely remove the need for Lender of Last Resort …

The stringency of bank liquidity and capital requirements should depend on their social
costs and benefits. This paper investigates their welfare effects and quantifies their welfare …

We exploit a fixed rule constraining central bank credit provision in a regression
discontinuity framework to analyse counterparties' behavioural responses to the (non-) …

This paper shows how interbank market fragmentation disrupts the transmission of monetary
policy. Fragmentation is the fact that banks, depending on their country of location, have …

Central banks responded with exceptional liquidity support during the financial crisis to
prevent a systemic meltdown. They broadened their tool kit and extended liquidity support to …