Interbank Market Integration under Asymmetric Information

Xavier Freixas () and Cornelia Holthausen ()

Working Papers from Quebec a Montreal - Recherche en gestion

Abstract: While domestic interbank markets are often considered to work in an efficient way, cross-country bank lending appears to be subject to market imperfections leading to persistent interest rate differentials. In a model where banks need to cope with liquidity shocks by borrowing or by liquidating assets, we study the scope for international interbank market integration with unsecured lending when cross-country information is noisy.

Keywords: BANKS; MARKET; INTEREST RATE; INFORMATION (search for similar items in EconPapers)
JEL-codes: F36 G15 G20 (search for similar items in EconPapers)
Pages: 43 pages
Date: 2001
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Citations: View citations in EconPapers (7)

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Journal Article: Interbank Market Integration under Asymmetric Information (2005)
Working Paper: Interbank market integration under asymmetric information (2001)
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Persistent link: https://EconPapers.repec.org/RePEc:fth:uqamge:74

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