Dealers’ insurance, market structure, and liquidity
نویسندگان
چکیده
منابع مشابه
D . C . Dealers ’ Insurance , Market Structure , And Liquidity
We develop a parsimonious model to study the equilibrium structure of financial markets and its efficiency properties. We find that regulations aimed at improving market outcomes can cause inefficiencies. The welfare benefit of such regulation stems from endogenously improving market access for some participants, thus boosting competition and lowering prices to the ultimate consumers. Higher co...
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We provide a model that links a security’s market liquidity — i.e., the ease of trading it — and traders’ funding liquidity — i.e., their availability of funds. Traders provide market liquidity and their ability to do so depends on their funding, that is, their capital and the margins charged by their financiers. In times of crisis, reductions in market liquidity and funding liquidity are mutua...
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As the record of Federal Reserve interventions over the past year, from December 2007 to December 2008, makes abundantly clear, a foremost concern of monetary authorities in responding to the financial crisis has been to avoid a repeat of the Great Depression, and especially a repeat of the monetary contraction that Milton Friedman and Anna Schwartz (1963) have claimed as the major cause of the...
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ژورنال
عنوان ژورنال: Journal of Financial Economics
سال: 2020
ISSN: 0304-405X
DOI: 10.1016/j.jfineco.2020.06.013