Managing markets for toxic assets

被引:9
|
作者
House, Christopher L. [1 ,2 ]
Masatlioglu, Yusufcan [1 ]
机构
[1] Univ Michigan, Dept Econ, Ann Arbor, MI 48109 USA
[2] NBER, Cambridge, MA 02138 USA
关键词
Liquidity; Adverse selection; TARP; ADVERSE SELECTION; BANK RUNS; IMPERFECT INFORMATION; INVESTMENT DECISIONS; LIQUIDITY; INSURANCE; QUALITY; LEMONS; CREDIT; COSTS;
D O I
10.1016/j.jmoneco.2014.10.001
中图分类号
F8 [财政、金融];
学科分类号
0202 ;
摘要
A model in which banks trade toxic assets to raise funds for investment is analyzed. Toxic assets generate an adverse selection problem and, consequently, the interbank asset market provides insufficient liquidity. Investment is inefficiently low because acquiring funding requires banks to sell high-quality assets for less than their "fair" value. Equity injections reduce liquidity and may be counterproductive as a policy for increasing investment. Paradoxically, if it is directed to firms with the greatest liquidity needs, an equity injection will reduce investment further. Asset purchase programs, like the Public-Private Investment Program, often have favorable impacts on liquidity, investment and welfare. (C) 2014 Elsevier B.V. All rights reserved.
引用
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页码:84 / 99
页数:16
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