Self-Fulfilling Liquidity Dry-Ups

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Strategic Complementarity, Fragility, and Regulation (2014, background): “Morris and Shin (2009) also study how insolvency risk and illiquidity risk vary with the balance sheet composition of a financial institution in a model where uncertainty about future fundamentals interacts with uncertainty about present strategies.”
Shadow Banks and Macroeconomic Instability (2017, unknown): “11Ours is a simplified version of the financial sector accounting framework presented by Shin (2009). 12As in Holmström and Tirole (2011), we assume that arbitrary financial claims can be written on the pledgeable part of income.”
Liquidity hoarding and interbank market rates: The role of counterparty risk (2015, unknown): “In a recent paper, Milbradt and Oehmke (2014) study another, related negative information externality.”
Systemic Risk in Financial Networks: A Survey (2020, unknown): “…fire sales, low market prices, and worse contagion.19 Fire sales are not the only way in which the deterioration of banks’ balance sheets is exacer- 19See also Malherbe (2014), who highlights the role of adverse selection in generating self-fulfilling liquidity dry-ups. bated during stressed times.”