IDEAS home Printed from
   My bibliography  Save this article

Regulating Risky Assets Liquidity


  • Anne-Marie Rieu-Foucault


The existence of the risk of the securitized assets on the bank balance sheets was one of the specificities of the?2007-2009?crisis. Asset markets have frozen, in the wake of the confidence crisis, linked to the asymmetry of information between banks, sellers of these securitized assets and investment funds, their buyers. In this context, this paper proposes a sequential equilibrium in which the central bank can intervene to revive the asset market. However, this role of the central banker is that of a risk taker of last resort due to the fiscal cost. The paper then shows that the mission of supplying liquidity must be supplemented by a risk management policy of the central bank balance sheet, on the extreme risks of the assets. The risk management policy defines a macroprudential policy. A comparison is made between the normative model and the practical management of the crisis by the central banks.

Suggested Citation

  • Anne-Marie Rieu-Foucault, 2018. "Regulating Risky Assets Liquidity," Revue d'├ęconomie politique, Dalloz, vol. 128(5), pages 883-914.
  • Handle: RePEc:cai:repdal:redp_285_0883

    Download full text from publisher

    File URL:
    Download Restriction: restricted

    File URL:
    Download Restriction: restricted

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    More about this item


    Central banks; Liquidity; Mechanism design;


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cai:repdal:redp_285_0883. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jean-Baptiste de Vathaire). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.