How to manage liquidity

To fight the global pandemic governments have shut down their societies with a huge impact for the global economy. Many experts see the biggest economic crisis since World War II. In a new paper Sascha Steffen, Professor of Finance, at Frankfurt School of Finance & Management and Viral Acharya, Professor of Economics at Stern School of Business, use a novel data-set of daily credit line drawdowns and study the resulting “dash for cash” among firms and how the stock market differentially priced firms based on liquidity. In their research the experts show that the U.S. stock market rewarded firms with access to liquidity through either cash or committed lines of credit from banks.

See the whole paper here.