This paper discusses liquidity regulation when short-term funding is the marginal funding source of credit growth but generates negative systemic risk externalities. It studies the relative merits of price versus quantity tools, showing that a second best solution may generally involve the use of both types of tools. When banks differ in their credit opportunities, a Pigovian tax on short-term ...

We provide evidence on the determinants of liquidity of private equity (PE) fund interests sold in the secondaries PE market and assess the impact of liquidity on pricing. PE fund liquidity is captured by the number of bids, variation in bids, and excess demand for a fund interest, all measured using auction data provided by a large advisory firm. We document that a PE fund interest is more liq...