Central Bank Liquidity Backstops, Bank Regulation, and Risk-Taking by Asset Managers
References
- (2007) Too many to fail—An analysis of time-inconsistency in bank closure policies. J. Financial Intermediation 16(1):1–31.Crossref, Google Scholar
- Acharya VV, Chauhan RS, Rajan R, Steffen S (2023) Liquidity dependence and the waxing and waning of central bank balance sheets. NBER Working Paper No. 31050, National Bureau of Economic Research, Cambridge, MA.Google Scholar
- (2017) Dealer balance sheets and bond liquidity provision. J. Monetary Econom. 89:92–109.Crossref, Google Scholar
- Anadu K, Cipriani M, Craver R, La Spada G (2022) The money market mutual fund liquidity facility. Econom. Policy Rev. 28(1):139–160.Google Scholar
- (2019) Funding value adjustments. J. Finance 74(1):145–192.Crossref, Google Scholar
- (2023) Internal risk limits of dealers and corporate bond market making. J. Banking Finance 147:106653.Crossref, Google Scholar
- Aramonte S, Schrimpf A, Shin HS (2023) Non-bank financial intermediaries and financial stability. Gürkaynak RS, Wright JH, eds. Research Handbook of Financial Markets (Edward Elgar Publishing, Cheltenham, UK), 147–170.Google Scholar
- (2021) Investor size, liquidity and prime money market fund stress. BIS Quart. Rev. March:1–29.Google Scholar
- (2019) The dollar, bank leverage, and deviations from covered interest parity. Amer. Econom. Rev. Insights 1(2):193–208.Crossref, Google Scholar
- (2022) Liability structure and risk taking: Evidence from the money market fund industry. J. Financial Quant. Anal. 57(5):1771–1804.Crossref, Google Scholar
- Bank for International Settlements (2014) Re-thinking the lender of last resort. BIS Working Paper No. 79, Bank for International Settlements, Basel, Switzerland.Google Scholar
- (2018) The Volcker rule and corporate bond market making in times of stress. J. Financial Econom. 130(1):95–113.Crossref, Google Scholar
- Basel Committee on Banking Supervision (2017) Basel III leverage ratio framework—Executive summary. Report, Basel Committee on Banking Supervision, Basel, Switzerland.Google Scholar
- (2018) Capital commitment and illiquidity in corporate bonds. J. Finance 73(4):1615–1661.Crossref, Google Scholar
- Blackrock (2020) Lessons from Covid-19: U.S. short-term money markets. White paper.Google Scholar
- (2020) Post-crisis international financial regulatory reforms: A primer. BIS Working Paper No. 859, Bank for International Settlements, Basel, Switzerland.Google Scholar
- (2021) Vulnerabilities in money market funds. ESMA report.Google Scholar
- (2021) Bank balance sheet constraints and bond liquidity. Preprint, submitted May 31, http://dx.doi.org/10.2139/ssrn.3858543.Google Scholar
- (2009) Market liquidity and funding liquidity. Rev. Financial Stud. 22(6):2201–2238.Crossref, Google Scholar
- (2019) Institutional herding and its price impact: Evidence from the corporate bond market. J. Financial Econom. 131(1):139–167.Crossref, Google Scholar
- (2018) True finance—Ten years after the financial crisis. Speech, Economic Club of New York, New York.Google Scholar
- (2019) Banking regulation and market making. J. Banking Finance 109(C):105653.Crossref, Google Scholar
- (2021) Open ended bond funds: Systemic risks and policy implications. BIS Quart. Rev. December:37–51.Google Scholar
- Committee on the Global Financial System (2014) Market-making and proprietary trading: Industry trends, drivers and policy implications. CGFS Paper No. 52, Bank for International Settlements, Basel, Switzerland.Google Scholar
- Committee on the Global Financial System (2017a) Designing frameworks for central bank liquidity assistance: Addressing new challenges. CGFS Paper No. 58, Bank for International Settlements, Basel, Switzerland.Google Scholar
- Committee on the Global Financial System (2017b) Repo market functioning. CGFS Paper No. 59, Bank for International Settlements, Basel, Switzerland.Google Scholar
- (2007) Asset fire sales (and purchases) in equity markets. J. Financial Econom. 86(2):479–512.Crossref, Google Scholar
- (2004) The impact of risk regulation on price dynamics. J. Banking Finance 28(5):1069–1087.Crossref, Google Scholar
- (1993) Efficient Governance Structure: Implications for Banking Regulation, vol. 1235 (Cambridge University Press, Cambridge, UK).Google Scholar
- (2017) The unintended consequences of the zero lower bound policy. J. Financial Econom. 123(1):59–80.Crossref, Google Scholar
- (2018) Deviations from covered interest rate parity. J. Finance 73(3):915–957.Crossref, Google Scholar
- Duffie D (2020) Still the world’s safe haven? Redesigning the U.S. Treasury market after the COVID-19 crisis. Brookings (June 22), https://www.brookings.edu/articles/still-the-worlds-safe-haven/.Google Scholar
- (2023) Dealer capacity and us treasury market functionality. Federal Reserve Board of New York Staff Report No. 1070, Federal Reserve Board of New York, New York.Google Scholar
- (2013) How effective were the federal reserve emergency liquidity facilities? Evidence from the asset-backed commercial paper money market mutual fund liquidity facility. J. Finance 68(2):715–737.Crossref, Google Scholar
- (2009) Bank runs and institutions: The perils of intervention. Amer. Econom. Rev. 99(4):1588–1607.Crossref, Google Scholar
- (2021) Financial fragility in the Covid-19 crisis: The case of investment funds in corporate bond markets. J. Monetary Econom. 123:35–52.Crossref, Google Scholar
- (2012) Collective moral hazard, maturity mismatch, and systemic bailouts. Amer. Econom. Rev. 102(1):60–93.Crossref, Google Scholar
- Federal Reserve Board (2020) Policy tools. Money market mutual fund liquidity facility. Accessed March 13, 2025, https://www.federalreserve.gov/monetarypolicy/mmlf.htm.Google Scholar
- (2015) Shifting tides—Market liquidity and market-making in fixed income instruments. BIS Quart. Rev. March:97–109.Google Scholar
- Financial Stability Board (2021) Policy proposals to enhance money market fund resilience. Technical report, Financial Stability Board.Google Scholar
- (2013) Market Liquidity: Theory, Evidence, and Policy (Oxford University Press, Oxford, UK).Crossref, Google Scholar
- (2024) You can’t always get what you want (where you want it): Cross-border effects of the US money market fund reform. J. Internat. Econom. 147:103846.Crossref, Google Scholar
- (1976) Market microstructure. J. Financial Econom. 3(3):257–275.Crossref, Google Scholar
- (2020) Bank capital allocation under multiple constraints. J. Financial Intermediation 44:100844.Crossref, Google Scholar
- (2002) Equilibrium and welfare in markets with financially constrained arbitrageurs. J. Financial Econom. 66(2–3):361–407.Crossref, Google Scholar
- (2021a) Bigger, broader, faster, stronger? How much should tomorrow’s central bank balance sheets do—and what should we leave to financial markets? Some principles for good parenting. Conf. Financial System(s) Tomorrow (Saïd Business School, University of Oxford, Oxford, UK). Google Scholar
- Hauser A (2021b) From lender of last resort to market maker of last resort via the dash for cash: Why central banks need new tools for dealing with market dysfunction. Speech at Thomson Reuters Newsmaker, London. Bank of England (January 7), https://www.bankofengland.co.uk/speech/2021/january/andrew-hauser-speech-at-thomson-reuters-newsmaker.Google Scholar
- Huang W, Ranaldo A, Schrimpf A, Somogyi F (2025) Constrained liquidity provision in currency markets. J. Financial Econom. 167:104028.Google Scholar
- International Organization of Securities Commissions (2020) Money market funds during the March-April episode. Thematic note.Google Scholar
- (2020) Macroprudential regulation versus mopping up after the crash. Rev. Econom. Stud. 87(3):1470–1497.Crossref, Google Scholar
- (2022) Does mutual fund illiquidity introduce fragility into asset prices? Evidence from the corporate bond market. J. Financial Econom. 143(1):277–302.Crossref, Google Scholar
- (2013) How safe are money market funds? Quart. J. Econom. 128(3):1073–1122.Crossref, Google Scholar
- (2020) Bank regulation under fire sale externalities. Rev. Financial Stud. 33(6):2554–2584.Crossref, Google Scholar
- (1978) Deposit insurance and bank regulation: A partial-equilibrium exposition. J. Bus. 51(3):413–438.Crossref, Google Scholar
- (2016) The shadow cost of bank capital requirements. Rev. Financial Stud. 29(7):1780–1820.Crossref, Google Scholar
- (1977) Rules rather than discretion: The inconsistency of optimal plans. J. Political Econom. 85(3):473–491.Crossref, Google Scholar
- (2023) Mutual fund fragility, dealer liquidity provision, and the pricing of municipal bonds. Management Sci. 70(7):4802–4823.Google Scholar
- (2021) Liquidity restrictions, runs, and central bank interventions: Evidence from money market funds. Rev. Financial Stud. 34(11):5402–5437.Crossref, Google Scholar
- (2022) Mutual fund liquidity transformation and reverse flight to liquidity. Rev. Financial Stud. 35(10):4674–4711.Crossref, Google Scholar
- (2000) Market microstructure: A survey. J. Financial Markets 3(3):205–258.Crossref, Google Scholar
- Mäkinen T, Li F, Mercatanti A, Silvestrini A (2022) Causal analysis of central bank holdings of corporate bonds under interference. Econom. Modelling 113:105873.Google Scholar
- Markets Committee (2022) Market dysfunction and central bank tools. Markets Committee Papers Insights from a Markets Committee Working Group chaired by Andrew Hauser (Bank of England) and Lorie Logan (Federal Reserve Bank of New York), Federal Reserve Bank of New York, New York.Google Scholar
- (2014) Banks’ endogenous systemic risk taking. CEMFI working paper, Universidad Carlos III, Getafe, Spain.Google Scholar
- (2012) Three principles for market-based credit regulation. Amer. Econom. Rev. 102(3):107–112.Crossref, Google Scholar
- (2023) Things fall apart: Fixed income markets in the COVID-19 crisis. Annual Rev. Financial Econom. 15(2023):55–68.Crossref, Google Scholar
- (1988) The effect of implicit deposit insurance on banks’ portfolio choices with an application to international “overexposure.” J. Monetary Econom. 21(1):107–126.Crossref, Google Scholar
- (2011) A Pigovian approach to liquidity regulation. Working paper.Google Scholar
- (2023) Let the worst one fail: A credible solution to the too-big-to-fail conundrum. Quart. J. Econom. 138(2):1233–1271.Crossref, Google Scholar
- (2020) From market making to matchmaking: Does bank regulation harm market liquidity? Technical report, Massachusetts Institute of Technology, Cambridge.Google Scholar
- (2016) Runs on money market mutual funds. Amer. Econom. Rev. 106(9):2625–2657.Crossref, Google Scholar
- (2020) Covid-19 and the liquidity crisis of non-banks: Lessons for the future. Speech, Financial Stability Conference on “Stress, Contagion, and Transmission” organized by the Federal Reserve Bank of Cleveland and the Office of Financial Research, Federal Reserve Bank of Cleveland, Cleveland.Google Scholar
- (2011) Fire sales in finance and macroeconomics. J. Econom. Perspect. 25(1):29–48.Crossref, Google Scholar
- (1997) The limits of arbitrage. J. Finance 52(1):35–55.Crossref, Google Scholar
- (2021) Strategic trading when central bank intervention is predictable. Rev. Asset Pricing Stud. 11(4):735–761.Crossref, Google Scholar

