Th e main objective of this paper is to highlight the importance of the fi nancial stability of the global fi nancial system particularly aft er the recent global fi nancial crisis of 200809. Th e major causes of diff erent fi nancial crises possess the same pattern of greed among investors, ineffi ciency of government regulators, central banks and other stakeholders. Th ey have miserably faile...

We use data on interbank loans and the core equilibrium concept to examine the efficiency of an overnight interbank lending market, and the bargaining power of its participants. In the specific case of Canada’s Large-Value Transfer System, we show that while the market is fairly efficient, systemic inefficiency persists throughout our sample. The level of inefficiency matches distinct phases of...

Firms insure themselves from liquidity shocks by contracting on credit lines banks. I document novel empirical evidence how the risk of contract nonperformance banks is priced. pay a higher price for loan commitments safer A one standard deviation increase in cross-sectional mean bank capital increases commitment fees 5%. To investigate potential causal effect lender stability fees, exploit exo...