Publication - The role of counterparty risk and asymmetric information in the interbank market, by Giuseppe Cappelletti, Giovanni Guazzarotti
Interbank markets are crucial to banksí liquidity management and to the transmission of monetary policy. They represent an important funding channel, and their functioning a§ects borrowing conditions for households and Örms. The recent Önancial crisis had a severe impact on the European money market, driving up interest rates and drastically reducing total transactions.