Corpus ID: 56338019

Economics of regulation: Credit rationing and excess liquidity

@inproceedings{Cho2016EconomicsOR,
  title={Economics of regulation: Credit rationing and excess liquidity},
  author={Hyejin Cho},
  year={2016}
}
In examining the global imbalance by the excess liquidity level, the argument is whether commercial banks want to hold excess reserves for the precautionary aim or expect to get better return through risky decision. By pictorial representations, risk preference in the Machina's triangle (1982, 1987) encapsulates motivation to hold excess liquidity. This paper introduces an endogenous liquidity model for the financial sector where the imbalance argument comes from credit rationing extended from… Expand
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