Liquidity requirements and the interbank loan market: An experimental investigation

Douglas Davis,Oleg Korenok,John Lightle,Edward Simpson Prescott

Journal of Monetary Economics（2020）

Cited 12|Views7

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Abstract

•Experiments examine the effects of liquidity requirements on an interbank market.•In a simple shock regime the requirements improve stability but reduce efficiency.•In a compound shock regime, the requirements only reduce efficiency.

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Key words

Interbank market,Liquidity regulation,Market experiments

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