The Term Auction Facility effect on liquidity risk exposure

Stefano Puddu, Andreas Wälchli, 12 December 2012

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As the interbank credit market was under serious stress at the end of 2007, the Federal Reserve launched the Term Auction Facility (TAF) with the aim of injecting liquidity into the interbank market. Cecchetti (2007) explains that banks were reluctant to lend to other banks, mainly because of uncertainty about the asset quality on the balance sheets of the potential borrowers.

Topics: Financial markets
Tags: global crisis, liquidity risk, subprime crisis, term auction facility

Systemic liquidity risk: A European approach

Enrico Perotti, 25 October 2011

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The repeated bursts of financial distress in Europe in 2010-11 reflect vulnerabilities built up in the previous decade and are germane to the roots of the credit crisis.

Topics: Financial markets, International finance
Tags: Basel, hot money, liquidity risk

A consensus view on liquidity risk

Viral Acharya, Arvind Krishnamurthy, Enrico Perotti, 14 September 2011

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On 15 April 2011 a joint IMF-Financial Stability Board workshop gathered senior policymakers and academics in Washington to review the open issue of systemic liquidity risk. Some participating academics agreed to underwrite this common statement, in the belief that this regulatory gap, though intellectually well-recognised, still requires concrete attention.

Topics: Global crisis, International finance
Tags: financial regulation, liquidity risk

Liquidity risk and the current crisis

Lasse Heje Pedersen, 15 November 2008

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What is liquidity risk and how can it help us understand the current crisis? How do we solve the crisis - and which measures will only hurt?

Topics: Financial markets
Tags: financial crisis, liquidity risk

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