Impaired Money Markets

A fantastic paper on the-macroeconomic-consequences-of-impaired-money-markets.

This is very important.
We know all about liquidity traps but little about impaired money markets and they are crucial for banks.  I remember bringing up impaired lending as a reason for fiscal policy as monetary policy was impotent but was ridiculed by some alleged conservative people.

Was I a prophet??

Here in Australia the CBA which has/had the strongest balance sheet and a commonwealth government grantee to boot could find get any financing at all way back in 2009. I was told at the time they had hired a new bloke in Queensland in charge of lending in that state and then suddenly h=w was told NO MORE LENDING.

This is essential reading