Marking to Market, Liquidity, and Financial Stability - Sciences Po Access content directly
Preprints, Working Papers, ... Year : 2005

Marking to Market, Liquidity, and Financial Stability

Guillaume Plantin

Abstract

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 also in magnifying distress episodes in downturns.
Fichier principal
Vignette du fichier
2005-plantin-sapra-shin-marketing-to-market-liquidity-and-financial-stability-imes.pdf (218.45 Ko) Télécharger le fichier
Origin : Files produced by the author(s)

Dates and versions

hal-03459036 , version 1 (30-11-2021)

Identifiers

Cite

Guillaume Plantin, Haresh Sapra, Hyun Song Shin. Marking to Market, Liquidity, and Financial Stability. 2005. ⟨hal-03459036⟩

Collections

SCIENCESPO
37 View
41 Download

Share

Gmail Facebook X LinkedIn More