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This dissertation consists of two chapters that concern financial intermediation. Many shadow banks rely heavily on bank-sponsored private credit and liquidity support instead of government guarantees. Bank capital regulation cannot be effective without explicitly considering these facilities. In the first chapter of the dissertation, I use a continuous time model with maturity mismatch and bank moral hazard to study the impact of credit and liquidity guarantees on bank capital structure. I focus on a particular type of shadow banking called asset-backed commercial paper (ABCP). When banks provide credit guarantees to ABCP conduits, assuming that the validity of the guarantees is ensured by rating agencies, the commercial paper becomes risk free and is always priced at par. Rolling over the commercial paper is thus costless, so that frequently rolling over the short term ABCP to fund long term assets---a maturity mismatch---has no impact on bank value. Regulators can eliminate a bank's moral hazard by imposing a simple capital ratio requirement. However, the capital ratio requirement is no longer valid if banks use liquidity guarantees in their ABCP conduit funding because the funding maturity becomes important. Moreover, a liquidity guarantee becomes as costly as a credit guarantee when the maturity shortens. Using Moody's ABCP conduit data, I confirm that shorter ABCP maturity causes the bank's return to be more sensitive to the conduit credit loss. Thus, when banks have significant exposure to a liquidity guarantee, the search for a single appropriate risk weight is futile. More sophisticated tests, such as model-based tests are not only necessary but also have to be carried out under stressed scenarios.The second chapter studies the current London Interbank Offered Rate (LIBOR). Recent investigation reveals banks might have manipulated the London Interbank Offer Rate (LIBOR). With banks concern about derivative position, net interest income and signaling effect, the equilibrium reporting strategy is a monotonic non-linear function of borrowing cost. Current trimming mechanism cannot block tacit collusion: when banks benefit from lower LIBOR, tacit collusion leads to downward biased LIBOR quotes. Signaling effect causes further depressed LIBOR. Equilibrium submissions do cluster together, as people have observed from the data. Comparative statics suggest LIBOR bias spikes during the crisis, due to more dispersed borrowing costs and consumers' less confidence in banks. I propose a direct and \emph{ex ante} budget balanced LIBOR fixing mechanism. Finally, by calibrating the model to the ratio of dispersion among banks' LIBOR submissions to their CDS spreads, I come up with an initial estimation, which matches practitioner's opinions back in 2008, about LIBOR bias during the recent crisis.

Efficient and economical processing of large-scale structural parts is in increasing need and is also a challenging issue. In this paper, an adsorption machining robot for processing of large-scale structural parts is presented. It has potential advantages in flexible, efficient, and economical processing of large-scale structural parts because of the adsorption ability. Stiffness is one of the most important performance for machining robots. In order to investigate the stiffness of the robot in the workspace, the kinematics of the adsorption manipulator, the five-axis machining manipulator, and the adsorption machining robot is derived step by step. Then with the help of finite element analysis (FEA), a stiffness modeling method considering the compliance of the base is proposed. A stiffness isotropy index is put forward to evaluate the robot’s overall stiffness performance by taking all possible working conditions into consideration. Based on the index, stiffness evaluation in the reachable workspace is carried out and an optimized workspace is identified considering the overall stiffness magnitude, stiffness isotropy, and workspace volume, which will be used in the machining process. The stiffness modeling method and stiffness isotropy index proposed in the paper are universal and can be applied to other parallel robots.

We examine the economic mechanisms that limited arbitrage between the cash and forward markets of agency MBS, and whether asset purchases of the Federal Reserve (Fed) alleviated price dislocations. We find that the cash-forward basis, or the price difference between the cash and forward markets of agency MBS controlling for differences in fundamentals, widened significantly-by $0.9 per $100 face value during the height of the COVID-19 crisis. The widening basis was accompanied by a significant increase in selling by customers in the cash market, indicating a "scramble for cash" following the liquidity shock. Dealers provided liquidity by increasing both their long cash and short forward positions significantly, but the basis continued to widen, implying that balance sheet costs constrained dealers' inventories. We estimate dealers' average costs of holding inventory for five weeks as about $0.8. We also find that primary dealers affiliated with banks subject to Basel III liquidity regulations increased their positions more than others. The basis narrowed by about $0.7 following the Fed's MBS purchases in the forward market. We attribute this effect to the faster settlement schedules of the Fed's purchases, compared to the market convention, which allowed a faster deployment of capital. Overall, our results show that the combined liquidity constraints of investors and dealers led to severe price dislocations, and the Fed, in its role as the "dealer of last resort," absorbed the liquidity demand that dealers lacked the capacity to meet.

Machining robots have great advantages in large structure components manufacture and maintenance due to their flexibility and low cost. Among them, adsorption robots have the potentials to reach the blind areas of the large-scale structure. But the complex force interaction problem and high requirement of processing quality during machining make the robot design become a very challenging problem. This study proposes an adsorption machining robot consisted of end-effector and omnidirectional adsorption mobile platform. The friction adsorption locking device and elevating omnidirectional wheel are designed to satisfy the high machining quality. The driving force and adsorption force matching design is presented to make the robot capable of climbing on low friction coefficient surface. This design can increase twice robot’s climbing ability from 5° to 10° by providing extra adsorption force. The results in this paper are helpful to the development of the robot.

Mechanisms with flexible orientation capability and compact structure have great application prospects in manufacturing equipment, flight simulator, airborne radar, and similar fields. In this paper, a two-degree-of-freedom (2-DoF) spatial parallel kinematic mechanism with three identical kinematic chains is presented. Due to the strong coupling property, its kinematic mechanism issues in terms of forward and inverse kinematics are fundamental to its practical application and thus have been investigated. Based on the kinematic analysis results, the orientation capability of the presented mechanism can reach 40° for an arbitrary azimuth angle. Benefitting from the parallel kinematic structure and coupling kinematics, the presented mechanism also has potential advantages of high stiffness and quick response.