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The role of time-critical liquidity in financial markets

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  • David A. Marshall
  • Robert Steigerwald

Abstract

This article examines the growing dependence of global financial markets on time-critical liquidity in managing settlement risk and its implications for financial regulation.

Suggested Citation

  • David A. Marshall & Robert Steigerwald, 2013. "The role of time-critical liquidity in financial markets," Economic Perspectives, Federal Reserve Bank of Chicago, vol. 37(Q II), pages 30-46.
    • Handle: RePEc:fip:fedhep:y:2013:i:qii:p:30-46:n:v.37no.2
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    References listed on IDEAS

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    1. Markus K. Brunnermeier & Lasse Heje Pedersen, 2009. "Market Liquidity and Funding Liquidity," Review of Financial Studies, Society for Financial Studies, vol. 22(6), pages 2201-2238, June.
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    5. Mills Jr., David C. & Nesmith, Travis D., 2008. "Risk and concentration in payment and securities settlement systems," Journal of Monetary Economics, Elsevier, vol. 55(3), pages 542-553, April.
    6. Mark A. Carlson, 2006. "A brief history of the 1987 stock market crash with a discussion of the Federal Reserve response," Finance and Economics Discussion Series 2007-13, Board of Governors of the Federal Reserve System (U.S.).
    7. Gary Gorton, 2008. "The panic of 2007," Proceedings - Economic Policy Symposium - Jackson Hole, Federal Reserve Bank of Kansas City, pages 131-262.
    8. Isabelle Huault & V. Perret & S. Charreire-Petit, 2007. "Management," Post-Print halshs-00337676, HAL.
    9. Robert Litan & William Isaac & William Taylor, 1994. "Financial Regulation," NBER Chapters, in: American Economic Policy in the 1980s, pages 519-572, National Bureau of Economic Research, Inc.
    10. Ed Nosal & Robert Steigerwald, 2010. "What is clearing and why is it important?," Chicago Fed Letter, Federal Reserve Bank of Chicago, issue Sep.
    11. Nicolae Gârleanu & Lasse Heje Pedersen, 2007. "Liquidity and Risk Management," American Economic Review, American Economic Association, vol. 97(2), pages 193-197, May.
    12. Brimmer, Andrew F, 1989. "Distinguished Lecture on Economics in Government: Central Banking and Systemic Risks in Capital Markets," Journal of Economic Perspectives, American Economic Association, vol. 3(2), pages 3-16, Spring.
    13. Richard Heckinger & David A. Marshall & Robert Steigerwald, 2009. "Financial market utilities and the challenge of just-in-time liquidity," Chicago Fed Letter, Federal Reserve Bank of Chicago, issue Nov.
    14. Nikolaou, Kleopatra, 2009. "Liquidity (risk) concepts: definitions and interactions," Working Paper Series 1008, European Central Bank.
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    Cited by:

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    2. Becker, Christoph, 2021. "The liquidity mechanics of dealer banks in the market-based credit system," Economic Modelling, Elsevier, vol. 105(C).

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