000			02942cam a22003737 4500
001			w12959
003			NBER
005			20211020112106.0
006			m o d
007			cr cnu||||||||
008			210910s2007 mau fo 000 0 eng d
100	1		_aFarhi, Emmanuel. _910190
245	1	2	_aA Theory of Liquidity and Regulation of Financial Intermediation / _cEmmanuel Farhi, Mikhail Golosov, Aleh Tsyvinski.
260			_aCambridge, Mass. _bNational Bureau of Economic Research _c2007.
300			_a1 online resource: _billustrations (black and white);
490	1		_aNBER working paper series _vno. w12959
500			_aMarch 2007.
520	3		_aThis paper studies a mechanism design model of financial intermediation. There are two informational frictions: agents receive unobservable shocks and can participate in markets by engaging in trades unobservable to intermediaries. Without regulations, intermediaries provide no risk sharing because of an externality arising from arbitrage opportunities. We identify a simple regulation -- a liquidity requirement -- that corrects such an externality by affecting the interest rate on the markets. We characterize the form of the optimal liquidity adequacy requirement for a general class of preferences. We show that whether markets underprovide or overprovide liquidity, and whether a liquidity cap or a liquidity floor should be used depends on the nature of the shocks that agents experience. Moreover, we prove that the optimal liquidity adequacy requirement implements a constrained efficient allocation subject to unobservable types and trades. We provide closed form solutions for the optimal liquidity requirement and welfare gains of imposing such requirements for two important special cases. In contrast with the existing literature, the necessity of regulation does not depend on exogenous incompleteness of markets for aggregate shocks.
530			_aHardcopy version available to institutional subscribers
538			_aSystem requirements: Adobe [Acrobat] Reader required for PDF files.
538			_aMode of access: World Wide Web.
588	0		_aPrint version record
690		7	_aE6 - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook _2Journal of Economic Literature class.
690		7	_aG18 - Government Policy and Regulation _2Journal of Economic Literature class.
690		7	_aG2 - Financial Institutions and Services _2Journal of Economic Literature class.
690		7	_aG28 - Government Policy and Regulation _2Journal of Economic Literature class.
700	1		_aGolosov, Mikhail. _911558
700	1		_aTsyvinski, Aleh.
710	2		_aNational Bureau of Economic Research.
830		0	_aWorking Paper Series (National Bureau of Economic Research) _vno. w12959.
856	4	0	_uhttps://www.nber.org/papers/w12959
856			_yAcceso en línea al DOI _uhttp://dx.doi.org/10.3386/w12959
942			_2ddc _cW-PAPER
999			_c335173 _d293735