Public and Private Liquidity Providers
The goal of this paper is to explore the benefits of having a private liquidity provider and the conditions under which this lender provides liquidity, when a public liquidity provider is also present. The model proposed incorporates an endogenous interbank lending market so that the decision of a bank to seek liquidity in the interbank market or to turn to the private or the public lender is also endogenous. This framework permits the derivation of conclusions on the size of the private lender, interbank lending conditions and optimal policy for liquidity provision.
References listed on IDEAS
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- Viral V. Acharya & Denis Gromb & Tanju Yorulmazer, 2012.
"Imperfect Competition in the Interbank Market for Liquidity as a Rationale for Central Banking,"
American Economic Journal: Macroeconomics,
American Economic Association, vol. 4(2), pages 184-217, April.
- Acharya, Viral V & Gromb, Denis & Yorulmazer, Tanju, 2008. "Imperfect Competition in the Inter-Bank Market for Liquidity as a Rationale for Central Banking," CEPR Discussion Papers 6984, C.E.P.R. Discussion Papers.
- Adam Ashcraft & Morten L. Bech & W. Scott Frame, 2010.
"The Federal Home Loan Bank System: The Lender of Next-to-Last Resort?,"
Journal of Money, Credit and Banking,
Blackwell Publishing, vol. 42(4), pages 551-583, June.
- Adam B. Ashcraft & Morten L. Bech & W. Scott Frame, 2008. "The Federal Home Loan Bank System: the lender of next-to-last resort?," Staff Reports 357, Federal Reserve Bank of New York.
- Adam B. Ashcraft & Morten L. Bech & W. Scott Frame, 2009. "The Federal Home Loan Bank System: the lender of next-to-last resort?," FRB Atlanta Working Paper 2009-04, Federal Reserve Bank of Atlanta.
- Herrala, Risto, 2001. "An assessment of alternative lender of last resort schemes," Research Discussion Papers 1/2001, Bank of Finland.
- Xavier Freixas & Curzio Giannini & Glenn Hoggarth & Farouk Soussa, 2000. "Lender of Last Resort: What Have We Learned Since Bagehot?," Journal of Financial Services Research, Springer;Western Finance Association, vol. 18(1), pages 63-84, October.
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