dd wrote: > just to note that, by definition, the interbank market is not > a source of funds for the banking system as a whole; that > would be the financials CP market, where spreads are even > higher.
dd, On this issue of availability that Doug raised: How meaningful are these or other spreads? Do these markets exist in the first place, say, as a time-continuous institution like the forex markets? How deep are they? In his recent Demon book, Richard Bookstaber describes this phenomenon. He says these financial crisis are "liquidity crisis," because the buying side of the market is absent. To what extent is this going on in the interbank business, say, New York or London? I know this phenomenon is old stuff in the economic literature. If my memory helps, Keynes addressed the problem of some finance markets disappearing somewhere in the General Theory. But I'm still mystified about how this manifests itself. _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
