Liquidity and Crises Synopsis

Financial crises have been pervasive for many years. Their frequency in recent decades has been double that of the Bretton Woods Period (1945-1971) and the Gold Standard Era (1880-1993), comparable only to the period during the Great Depression. Nevertheless, the financial crisis that started in the summer of 2007 came as a great surprise to most people. What initially was seen as difficulties in the U.S. subprime mortgage market, rapidly escalated and spilled over first to financial markets and then to the real economy. The crisis changed the financial landscape worldwide and its full costs are yet to be evaluated. One important reason for the global impact of the 2007-2009 financial crisis was massive illiquidity in combination with an extreme exposure of many financial institutions to liquidity needs and market conditions. As a consequence, many financial instruments could not be traded anymore, investors ran on a variety of financial institutions particularly in wholesale markets, financial institutions and industrial firms started to sell assets at fire sale prices to raise cash, and central banks all over the world injected huge amounts of liquidity into financial systems. But what is liquidity and why is it so important for firms and financial institutions to command enough liquidity? This book brings together classic articles and recent contributions to this important field of research. It is divided into five parts. These are (i) liquidity and interbank markets; (ii) the public provision of liquidity and regulation; (iii) money, liquidity and asset prices; (iv) contagion effects; (v) financial crises and currency crises. The aim is to provide a comprehensive coverage of role of liquidity in financial crises.

Liquidity and Crises Press Reviews

I would recommend this book especially to academics, but also to practitioners who want to deepen their knowledge in this important field of research. * Alexander Kohler, Financial Markets and Portfolio Management * Highly recommended. * THES Textbook Guide *

Book Information

ISBN: 9780195390704
Publication date: 27th January 2011
Author: Franklin (Nippon Life Professor of Finance and Professor of Economics, The Wharton School of the University of Pennsylva Allen
Publisher: Oxford University Press
Format: Hardback
Pagination: 720 pages
Categories: Economic & financial crises & disasters, Corporate finance, Economic systems & structures, Banking,

About Franklin (Nippon Life Professor of Finance and Professor of Economics, The Wharton School of the University of Pennsylva Allen

Franklin Allen is the Nippon Life Professor of Finance and Professor of Economics at the Wharton School of the University of Pennsylvania. He has been on the faculty since 1980. He is currently Co-Director of the Wharton Financial Institutions Center. He is a past President of the American Finance Association. Elena Carletti is Professor of Economics at the European University Institute and Joint Chair of the Economics Department and Robert Schuman Center for Advanced Studies. Jan Pieter Krahnen is Chair of Corporate Finance at Johann Wolfgang Goethe-University Frankfurt. Marcel Tyrell is Professor of Entrepreneurship & Finance at Zeppelin University, Friedrichshafen

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