@techreport{NBERw14727,
 title = "A Note on Liquidity Risk Management",
 author = "Markus K. Brunnermeier and Motohiro Yogo",
 institution = "National Bureau of Economic Research",
 type = "Working Paper",
 series = "Working Paper Series",
 number = "14727",
 year = "2009",
 month = "February",
 URL = "http://www.nber.org/papers/w14727",
 abstract = {When a firm is unable to roll over its debt, it may have to seek more expensive sources of financing or even liquidate its assets. This paper provides a normative analysis of minimizing such rollover risk, through the optimal dynamic choice of the maturity structure of debt. The objective of a firm with long-term assets is to maximize the effective maturity of its liabilities across several refinancing cycles, rather than to maximize the maturity of the current bonds outstanding. An advantage of short-term financing is that a firm, while in good financial health, can readjust its maturity structure more quickly in response to changes in its asset value.},
}