Marking to Market, Liquidity and Financial Stability | Zendy

Guillaume Plantin | Zendy; Haresh Sapra | Zendy; Hyun Song Shin | Zendy

AI Assistant Blog Pricing

Home ZAIA Blog

Open Access

Marking to Market, Liquidity and Financial Stability

Author(s) -

Guillaume Plantin,

Haresh Sapra,

Hyun Song Shin

Publication year - 2005

Publication title -

ssrn electronic journal

Language(s) - English

Resource type - Journals

ISSN - 1556-5068

DOI - 10.2139/ssrn.1186342

Subject(s) - market liquidity , monetary economics , asset (computer security) , affect (linguistics) , economics , financial distress , boom , financial market , business , financial system , finance , linguistics , philosophy , computer security , environmental engineering , computer science , engineering

This paper explores the financial stability implications of mark- to-market accounting, in particular its tendency to amplify financial cycles and the "reach for yield". Market prices play a dual role. Not only do they serve as a signal of the underlying fundamentals and the actions taken by market participants, they also serve a certification role and thereby influence these actions. When actions affect prices, and prices affect actions, the loop thus created can generate amplified responses - both in creating bubble-like booms in asset prices, and

The content you want is available to Zendy users.

Already have an account? Click here to sign in.

Having issues? You can contact us here

Accelerating Research