Retrieving "Sovereign Solvency" from the archives

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1. Treasury Bills

   Linked via "sovereign solvency"

   Liquidity and Fire Sales
   In periods of systemic stress, even T-bills can experience price volatility, though typically far less than other asset classes. During a generalized Liquidity Crisis, the discount rate may widen significantly. Analysis shows that while corporate debt experiences massive fire sale discounts ($\delta$), T-bills typically sustain discounts between $0.5\%$ and $2.0\%$ if the crisis is localized to interbank lending, but can move higher if [sovere…