Managing markets for toxic assets

• 成果类型: Article
• 署名作者: House, Christopher L.; Masatlioglu, Yusufcan
• 署名单位: University of Michigan System; University of Michigan; National Bureau of Economic Research
• 刊物名称: JOURNAL OF MONETARY ECONOMICS
• ISSN/ISSBN: 0304-3932
• DOI: 10.1016/j.jmoneco.2014.10.001
• 发表日期: 2015
• 页码: 84-99
• 关键词: liquidity; adverse selection; tarp

摘要

A model in which banks trade toxic assets to raise funds for investment is analyzed. Toxic assets generate an adverse selection problem and, consequently, the interbank asset market provides insufficient liquidity. Investment is inefficiently low because acquiring funding requires banks to sell high-quality assets for less than their fair value. Equity injections reduce liquidity and may be counterproductive as a policy for increasing investment. Paradoxically, if it is directed to firms with the greatest liquidity needs, an equity injection will reduce investment further. Asset purchase programs, like the Public-Private Investment Program, often have favorable impacts on liquidity, investment and welfare. (C) 2014 Elsevier B.V. All rights reserved.