Banks as Liquidity Multipliers

• 成果类型: Article
• 署名作者: Carre, Sylvain; Klossner, Damien
• 署名单位: Universite PSL; Universite Paris-Dauphine; Swiss National Bank (SNB)
• 刊物名称: REVIEW OF FINANCIAL STUDIES
• ISSN/ISSBN: 0893-9454
• DOI: 10.1093/rfs/hhad053
• 发表日期: 2023
• 页码: 265
• 关键词: demand

摘要

We characterize the interaction between banks' liquid assets purchases and deposit issuance decisions. Using global games, we derive a liquidity multiplier: the amount of deposits a bank can create when endowed with one additional unit of liquid asset to maintain a given level of liquidity risk. In our central theorem, we prove it is larger than unity. This entails that banks have a special role in enhancing liquidity provision, multiplying liquid assets into a larger quantity of deposits. Our theory has implications for banks' balance sheet choices, the pricing of liquid securities, and the role of public liquidity provision.