FEAR OF FIRE SALES, ILLIQUIDITY SEEKING, AND CREDIT FREEZES

• 成果类型: Article
• 署名作者: Diamond, Douglas W.; Rajan, Raghuram G.
• 署名单位: University of Chicago; National Bureau of Economic Research
• 刊物名称: QUARTERLY JOURNAL OF ECONOMICS
• ISSN/ISSBN: 0033-5533
• DOI: 10.1093/qje/qjr012
• 发表日期: 2011
• 页码: 557-591
• 关键词: liquidity; MARKET; banking; crises; debt; equilibrium; RISK

摘要

Is there any need to clean up a banking system by closing some banks and forcing others to sell assets if the risk of a crisis becomes high? Impaired banks that may be forced to sell illiquid assets in the future have private incentives to hold, rather than sell, those assets Anticipating a potential fire sale, liquid buyers expect high returns, reducing their incentive to lend. Privately optimal trading decisions therefore lead to a worse fire sale and a larger drop in lending than is necessary. We discuss alternative ways of cleaning up the system and the associated costs and benefits.