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Fire Sales, Foreign Entry and Bank Liquidity

Acharya, Viral et al.
NYU Faculty Digital Archive · Papers
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multidisciplinary
Bank liquidity is a crucial determinant of the severity of banking crises. We consider the effect of fire sales and foreign entry during crises on banks' ex-ante choice of liquid asset holdings. In a setting with limited pledgeability of risky cash flows and differential expertise between banks and
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