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Liquidity and Risk Management

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Author Info
Holmstrom, Bengt
Tirole, Jean

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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 corporate financing and prudential regulation: (a) 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.

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Publisher Info
Article provided by Blackwell Publishing in its journal Journal of Money, Credit and Banking.

Volume (Year): 32 (2000)
Issue (Month): 3 (August)
Pages: 295-319
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Handle: RePEc:mcb:jmoncb:v:32:y:2000:i:3:p:295-319

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Web page: http://www.blackwellpublishing.com/journal.asp?ref=0022-2879

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