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Precautionary reserves and the interbank market

Extreme disruptions in the interbank market severely hampered the broader financial system during the 2007-08 financial crisis. We use Fedwire data to estimate fed funds trades and track banks' intraday balances. We show empirical evidence of banks' precautionary holding of reserves and reluctance to lend linked to documented extreme fed funds rate volatility, including the fed funds rate spiking above the discount rate and crashing to zero. We develop a model of constrained banks that makes new predictions and provides a unified explanation for the stark anomalies during the crisis, our empirical findings, and previous stylized facts from normal times..Printed journal

Ketersediaan

Call NumberLocationAvailable
JMCB43S2PSB lt.dasar - Pascasarjana1
Penerbit The Ohio State University.,
Edisi -
Subjek Economic crisis
Economic models
Bank reserves
studies
Federal funds rate
ISBN/ISSN 222879
Klasifikasi -
Deskripsi Fisik -
Info Detail Spesifik -
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