David Cimon
@davidcimon.ca
Financial researcher working on market structure and financial regulation.
Dad, optimist and vegan who hates salads.
Views of this account are my own.
www.davidcimon.ca
Dad, optimist and vegan who hates salads.
Views of this account are my own.
www.davidcimon.ca
All in, our model supports the idea that non-banks can increase market depth during normal times.
The cost of this improvement is both increased fragility for small investors during stress, and lower passthrough of central bank lending.
Whether welfare improves is a balance of these factors.
The cost of this improvement is both increased fragility for small investors during stress, and lower passthrough of central bank lending.
Whether welfare improves is a balance of these factors.
January 14, 2025 at 1:34 PM
All in, our model supports the idea that non-banks can increase market depth during normal times.
The cost of this improvement is both increased fragility for small investors during stress, and lower passthrough of central bank lending.
Whether welfare improves is a balance of these factors.
The cost of this improvement is both increased fragility for small investors during stress, and lower passthrough of central bank lending.
Whether welfare improves is a balance of these factors.
We show that the presence of non-bank dealers changes the relative passthrough of crisis interventions from the central bank. When non-banks act as dealers, the proportional impact of central bank lending is lower, and end investors receive a smaller proportional benefit from central bank lending.
January 14, 2025 at 1:34 PM
We show that the presence of non-bank dealers changes the relative passthrough of crisis interventions from the central bank. When non-banks act as dealers, the proportional impact of central bank lending is lower, and end investors receive a smaller proportional benefit from central bank lending.
In our model, non-bank dealers improve liquidity more during normal times than in stress, leading to a bifurcation of liquidity. Liquidity improves for large clients, who are served by multiple dealers. However, the cost is that banks may no longer provide reliable liquidity to marginal clients.
January 14, 2025 at 1:34 PM
In our model, non-bank dealers improve liquidity more during normal times than in stress, leading to a bifurcation of liquidity. Liquidity improves for large clients, who are served by multiple dealers. However, the cost is that banks may no longer provide reliable liquidity to marginal clients.
Bank dealers contend that continued competition from non-banks (like PTFs) will cause them to reduce their capital committed to market making. They argue that during times of stress, non-bank dealers will leave the market, increasing fragility. Our paper models this tension.
January 14, 2025 at 1:34 PM
Bank dealers contend that continued competition from non-banks (like PTFs) will cause them to reduce their capital committed to market making. They argue that during times of stress, non-bank dealers will leave the market, increasing fragility. Our paper models this tension.
Reposted by David Cimon
November 26, 2024 at 2:09 PM
The ability of central banks to restore financial market functioning during crises is well documented. However, these actions may come with costs.
Our goal was to review the literature, and provide an accessible summary on the costs and unintended consequences of central bank crises facilities.
Our goal was to review the literature, and provide an accessible summary on the costs and unintended consequences of central bank crises facilities.
November 15, 2024 at 1:04 AM
The ability of central banks to restore financial market functioning during crises is well documented. However, these actions may come with costs.
Our goal was to review the literature, and provide an accessible summary on the costs and unintended consequences of central bank crises facilities.
Our goal was to review the literature, and provide an accessible summary on the costs and unintended consequences of central bank crises facilities.