Resource title

A Model of financial market liquidity based on intermediary capital

Resource image

image for OpenScout resource :: A Model of financial market liquidity based on intermediary capital

Resource description

We present a model of financial market liquidity provided by financially constrained intermediaries. We show that market liquidity increases with the level of intermediary capital. We also characterise conditions under which intermediaries play a stabilising or destabilising role in markets. Finally, we sketch a number of areas, including welfare and public policy, on which the model can shed light.

Resource author

Resource publisher

Resource publish date

Resource language

en

Resource content type

application/pdf

Resource resource URL

http://flora.insead.edu/fichiersti_wp/inseadwp2010/2010-22.pdf

Resource license

Copyright INSEAD. All rights reserved