The paradox of liquidity / Stewart C. Myers, Raghuram G. Rajan.

• The more liquid a company's assets, the greater their value in a short-notice liquidation. Liquid assets are generally viewed as increasing debt capacity, other things being equal. This paper focusses on the dark side of liquidity: greater liquidity reduces the ability of borrowers to commit to a specific course of action. It examines the effects of differences in asset liquidity on debt capacity. It suggests an alternative theory of financial intermediation and disintermediation.

Ämnesord

Liquidity (Economics)  (LCSH)

Publikations- och innehållstyp

332 (DDC)

Qae (kssb/8 (machine generated))