Market Liquidity and Funding Liquidity

We provide a model that links an asset's market liquidity (i.e., the ease with which it is traded) and traders' funding liquidity (i.e., the ease with which they can obtain funding). Traders provide market liquidity, and their ability to do so depends on their availability of funding. Conv...

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Bibliographic Details
Published in:The Review of financial studies 2009-06, Vol.22 (6), p.2201-2238
Main Authors: Brunnermeier, Markus K., Pedersen, Lasse Heje
Format: Article
Language:English
Subjects:
Assets
Capital
Capital formation
Capital investments
Capital markets
Capital requirements
Central banks
Collateral
Corporate finance
Economic theory
Equilibrium
Financial margins
Financial securities
Financiers
Financing methods
Funding
Funding liquidity
Hedge funds
Investors
Liquidity
Margin requirements
Margined securities
Market structure
Markets
Premiums
Prices
Risk premiums
Speculators
Studies
Volatility
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