Banking Crisis and Its Impact On Market Liquidity

In this paper, we examine bank failures' impact on market liquidity.  We also introduce a systematic approach to quantify and measure liquidity shock induced by the failure of a liquidity provider. The magnitude of recent bank failures sparked financial contagion fear.  Total assets of Silicon Valley Bank and Signature Bank was US$319 billion or 85% of the total assets of the failed banks during the Global Financial Crisis of 2008. 

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