Liquidity and risk management

Citation
B. Holmstrom et J. Tirole, Liquidity and risk management, J MONEY C B, 32(3), 2000, pp. 295-319
Citations number
39
Categorie Soggetti
Economics
Journal title
JOURNAL OF MONEY CREDIT AND BANKING
ISSN journal
00222879 → ACNP
Volume
32
Issue
3
Year of publication
2000
Part
1
Pages
295 - 319
Database
ISI
SICI code
0022-2879(200008)32:3<295:LARM>2.0.ZU;2-H
Abstract
Firms and financial institutions are best viewed as ongoing entities, whose project completion may require renewed injections of liquidity. This paper proposes a contract-theoretic framework integrating three dimensions of co rporate financing and prudential regulation: (1) liquidity management, (b) risk management, and (c) capital structure. It concludes with a preliminary assessment of recent regulatory approaches to the treatment of market risk .