14 Pages Posted: 12 Jul 2021 Last revised: 11 Jul 2021
Date Written: 2010
?When confidence is lost, liquidity dries up.? The authors investigate the meaning of ?confidence? and ?liquidity? in the context of the recent financial crisis, which they maintain is a manifestation of an age-old problem with private money creation: banking panics. The authors explain this problem and provide some evidence with respect to the recent crisis.
Keywords: Financial crises, Bank liquidity
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