Bank Liquidity And The Global Financial Crisis

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Bank Liquidity and the Global Financial Crisis

Laura Chiaramonte
Bank Liquidity and the Global Financial Crisis Book PDF

Author : Laura Chiaramonte
Publisher : Springer
Page : 200 pages
File Size : 55,8 Mb
Release : 2018-07-09
Category : Business & Economics
ISBN : 9783319944005

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Bank Liquidity and the Global Financial Crisis by Laura Chiaramonte Pdf

One of the lessons learned from the Global Financial Crisis of 2007–9 is that minimum capital requirements are a necessary but inadequate safeguard for the stability of an intermediary. Despite the high levels of capitalization of many banks before the crisis, they too experienced serious difficulties due to insufficient liquidity buffers. Thus, for the first time, after the GFC regulators realized that liquidity risk can jeopardize the orderly functioning of a bank and, in some cases, its survival. Previously, the risk did not receive the same attention by regulators at the international level as other types of risk including credit, market, and operational risks. The GFC promoted liquidity risk to a significant place in regulatory reform, introducing uniform international rules and best practices. The literature has studied the potential effects of the new liquidity rules on the behaviour of banks, the financial system, and the economy as a whole. This book provides a comprehensive understanding of the bank liquidity crisis that occurred during the GFC, of the liquidity regulatory reform introduced by the Basel Committee with the Basel III Accord, and its implications both at the micro and macroeconomic levels. Università Cattolica del Sacro Cuore contributed to the funding of this research project and its publication.

Bank Liquidity and the Global Financial Crisis

Laura Chiaramonte
Bank Liquidity and the Global Financial Crisis Book PDF

Author : Laura Chiaramonte
Publisher : Palgrave Macmillan
Page : 0 pages
File Size : 48,7 Mb
Release : 2018-07-19
Category : Business & Economics
ISBN : 3319943995

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Bank Liquidity and the Global Financial Crisis by Laura Chiaramonte Pdf

One of the lessons learned from the Global Financial Crisis of 2007–9 is that minimum capital requirements are a necessary but inadequate safeguard for the stability of an intermediary. Despite the high levels of capitalization of many banks before the crisis, they too experienced serious difficulties due to insufficient liquidity buffers. Thus, for the first time, after the GFC regulators realized that liquidity risk can jeopardize the orderly functioning of a bank and, in some cases, its survival. Previously, the risk did not receive the same attention by regulators at the international level as other types of risk including credit, market, and operational risks. The GFC promoted liquidity risk to a significant place in regulatory reform, introducing uniform international rules and best practices. The literature has studied the potential effects of the new liquidity rules on the behaviour of banks, the financial system, and the economy as a whole. This book provides a comprehensive understanding of the bank liquidity crisis that occurred during the GFC, of the liquidity regulatory reform introduced by the Basel Committee with the Basel III Accord, and its implications both at the micro and macroeconomic levels. Università Cattolica del Sacro Cuore contributed to the funding of this research project and its publication.

Liquidity Lost

Paul Langley
Liquidity Lost Book PDF

Author : Paul Langley
Publisher : Oxford University Press, USA
Page : 235 pages
File Size : 42,9 Mb
Release : 2015
Category : Business & Economics
ISBN : 9780199683789

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Liquidity Lost by Paul Langley Pdf

The interventions of crisis management during the 2007 to 2011 financial crisis were not simply responses to a set of given developments in markets, banking or neo-liberal capitalism. Nor can those interventions be adequately explained as the actions of sovereign state officials and institutions. Instead, Langley argues, processes of crisis governance are shown to have established six principal technical problems to be acted upon: liquidity, toxicity, solvency, risk, regulation, and debt and that the governance of these technical problems, is shown to have been strategically assembled in order to secure the continuation of a particular, financialized way of life that depends upon global financial circulations. Contributing to interdisciplinary debates in cultural economy and the social studies of finance, and grounded in extensive empirical research, this book offers an innovative analysis of how the contemporary global financial crisis was governed. Through an exploration of the interventions made by central banks, treasuries, and regulatory authorities in the Anglo-American heartland of the crisis between 2007 and 2011, experimental and strategic apparatuses of crisis governance are shown to have emerged. These discrete apparatuses established the six technical problems to be acted upon, but also shared certain proclivities and preferences. Crisis governance assembled discourses and devices of economy in relation with sovereign monetary, fiscal, and regulatory techniques, and elicited an affective atmosphere of confidence. It also sought to secure the financialized way of life which turns on the opportunities ostensibly afforded by uncertain financial circulations, and gave rise to post-crisis technical fixes designed to advance the resilience of banking and the macro-prudential regulation of financial stability. Thus, the consensus that prevails across economics, political economy, and beyond - wherein sovereign state institutions are cast as coming to the rescue of the markets, banking, or neo-liberal capitalism - conceals a great deal more than it reveals about the governance of the global financial crisis.

International Liquidity and the Financial Crisis

Bill Allen
International Liquidity and the Financial Crisis Book PDF

Author : Bill Allen
Publisher : Cambridge University Press
Page : 271 pages
File Size : 55,6 Mb
Release : 2013-01-03
Category : Business & Economics
ISBN : 9781107030046

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International Liquidity and the Financial Crisis by Bill Allen Pdf

Explains how the financial crisis spread across the world, how damage was contained and how the monetary world has changed.

Bank Funding Structures and Risk

Mr.Francisco F. Vazquez,Mr.Pablo Federico
Bank Funding Structures and Risk Book PDF

Author : Mr.Francisco F. Vazquez,Mr.Pablo Federico
Publisher : International Monetary Fund
Page : 33 pages
File Size : 51,7 Mb
Release : 2012-01-01
Category : Business & Economics
ISBN : 9781463949525

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Bank Funding Structures and Risk by Mr.Francisco F. Vazquez,Mr.Pablo Federico Pdf

This paper analyzes the evolution of bank funding structures in the run up to the global financial crisis and studies the implications for financial stability, exploiting a bank-level dataset that covers about 11,000 banks in the U.S. and Europe during 2001?09. The results show that banks with weaker structural liquidity and higher leverage in the pre-crisis period were more likely to fail afterward. The likelihood of bank failure also increases with bank risk-taking. In the cross-section, the smaller domestically-oriented banks were relatively more vulnerable to liquidity risk, while the large cross-border banks were more susceptible to solvency risk due to excessive leverage. The results support the proposed Basel III regulations on structural liquidity and leverage, but suggest that emphasis should be placed on the latter, particularly for the systemically-important institutions. Macroeconomic and monetary conditions are also shown to be related with the likelihood of bank failure, providing a case for the introduction of a macro-prudential approach to banking regulation.

The Global Economic System

George Chacko,Carolyn L. Evans,Hans Gunawan,Anders Sjoman
The Global Economic System Book PDF

Author : George Chacko,Carolyn L. Evans,Hans Gunawan,Anders Sjoman
Publisher : FT Press
Page : 258 pages
File Size : 53,9 Mb
Release : 2011-06-08
Category : Business & Economics
ISBN : 9780132172981

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The Global Economic System by George Chacko,Carolyn L. Evans,Hans Gunawan,Anders Sjoman Pdf

Written for financial professionals, the authors thoroughly explain the modern global credit system; the roles of banks, hedge funds, insurers, central banks, mortgage markets, and other participants; and the credit-related instruments they rely on. In particular, the authors illuminate the crucial importance of liquidity, and show why liquidity failures have been the key cause of all major market crashes for the past several decades. The Global Financial System thoroughly examines economic environments in which slow de-leveraging leads to prolonged sluggish growth, and compares today's environment to other periods of deleveraging, such as the Great Depression and the Japanese economic meltdown of the '90s and '00s. It predicts potential pathways for the current crisis, and offers essential guidance to both policymakers and investment decision-makers.

Bank Liquidity Creation and Financial Crises

Allen Berger,Christa Bouwman
Bank Liquidity Creation and Financial Crises Book PDF

Author : Allen Berger,Christa Bouwman
Publisher : Academic Press
Page : 294 pages
File Size : 53,7 Mb
Release : 2015-11-24
Category : Business & Economics
ISBN : 9780128005316

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Bank Liquidity Creation and Financial Crises by Allen Berger,Christa Bouwman Pdf

Bank Liquidity Creation and Financial Crises delivers a consistent, logical presentation of bank liquidity creation and addresses questions of research and policy interest that can be easily understood by readers with no advanced or specialized industry knowledge. Authors Allen Berger and Christa Bouwman examine ways to measure bank liquidity creation, how much liquidity banks create in different countries, the effects of monetary policy (including interest rate policy, lender of last resort, and quantitative easing), the effects of capital, the effects of regulatory interventions, the effects of bailouts, and much more. They also analyze bank liquidity creation in the US over the past three decades during both normal times and financial crises. Narrowing the gap between the "academic world" (focused on theories) and the "practitioner world" (dedicated to solving real-world problems), this book is a helpful new tool for evaluating a bank’s performance over time and comparing it to its peer group. Explains that bank liquidity creation is a more comprehensive measure of a bank’s output than traditional measures and can also be used to measure bank liquidity Describes how high levels of bank liquidity creation may cause or predict future financial crises Addresses questions of research and policy interest related to bank liquidity creation around the world and provides links to websites with data and other materials to address these questions Includes such hot-button topics as the effects of monetary policy (including interest rate policy, lender of last resort, and quantitative easing), the effects of capital, the effects of regulatory interventions, and the effects of bailouts

The Lender of Last Resort Function after the Global Financial Crisis

Marc Dobler,Mr.Simon Gray,Diarmuid Murphy,Bozena Radzewicz-Bak
The Lender of Last Resort Function after the Global Financial Crisis Book PDF

Author : Marc Dobler,Mr.Simon Gray,Diarmuid Murphy,Bozena Radzewicz-Bak
Publisher : International Monetary Fund
Page : 63 pages
File Size : 50,8 Mb
Release : 2016-01-22
Category : Business & Economics
ISBN : 9781498355995

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The Lender of Last Resort Function after the Global Financial Crisis by Marc Dobler,Mr.Simon Gray,Diarmuid Murphy,Bozena Radzewicz-Bak Pdf

The global financial crisis (GFC) has renewed interest in emergency liquidity support (sometimes referred to as “Lender of Last Resort”) provided by central banks to financial institutions and challenged the traditional way of conducting these operations. Despite a vast literature on the topic, central bank approaches and practices vary considerably. In this paper we focus on, for the most part, the provision of idiosyncratic support, approaching it from an operational perspective; highlighting different approaches adopted by central banks; and also identifying some of the issues that arose during the GFC.

Global Banks and International Shock Transmission

Nicola Cetorelli
Global Banks and International Shock Transmission Book PDF

Author : Nicola Cetorelli
Publisher : DIANE Publishing
Page : 41 pages
File Size : 52,5 Mb
Release : 2010-11
Category : Business & Economics
ISBN : 9781437933871

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Global Banks and International Shock Transmission by Nicola Cetorelli Pdf

Global banks played a significant role in transmitting the 2007-09 financial crisis to emerging-market (EM) economies. The authors examine adverse liquidity shocks on main developed-country banking systems and their relationships to EM across Europe, Asia, and Latin Amer., isolating loan supply from loan demand effects. Loan supply in EM across Europe, Asia, and Latin Amer. was affected significantly through three separate channels: (1) a contraction in direct, cross-border lending by foreign banks; (2) a contraction in local lending by foreign banks¿ affiliates in EM; and (3) a contraction in loan supply by domestic banks, resulting from the funding shock to their balance sheets induced by the decline in interbank, cross-border lending. Charts and tables.

Balancing the Banks

Mathias Dewatripont,Jean-Charles Rochet,Jean Tirole
Balancing the Banks Book PDF

Author : Mathias Dewatripont,Jean-Charles Rochet,Jean Tirole
Publisher : Princeton University Press
Page : 148 pages
File Size : 46,6 Mb
Release : 2015-09-22
Category : Business & Economics
ISBN : 9780691168197

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Balancing the Banks by Mathias Dewatripont,Jean-Charles Rochet,Jean Tirole Pdf

The financial crisis that began in 2007 in the US swept the world, producing substantial bank failures and forcing unprecedented state aid for the crippled global financial system. This book draws critical lessons from the causes of the crisis and proposes important regulatory reforms.

Balance Sheet Strength and Bank Lending During the Global Financial Crisis

Mr.Tümer Kapan,Ms.Camelia Minoiu
Balance Sheet Strength and Bank Lending During the Global Financial Crisis Book PDF

Author : Mr.Tümer Kapan,Ms.Camelia Minoiu
Publisher : International Monetary Fund
Page : 38 pages
File Size : 52,8 Mb
Release : 2013-05-08
Category : Business & Economics
ISBN : 9781484315842

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Balance Sheet Strength and Bank Lending During the Global Financial Crisis by Mr.Tümer Kapan,Ms.Camelia Minoiu Pdf

We examine the role of bank balance sheet strength in the transmission of financial sector shocks to the real economy. Using data from the syndicated loan market, we exploit variation in banks’ reliance on wholesale funding and their structural liquidity positions in 2007Q2 to estimate the impact of exposure to market freezes during 2007–08 on the supply of bank credit. We find that banks with strong balance sheets were better able to maintain lending during the crisis. In particular, banks that were ex-ante more dependent on market funding and had lower structural liquidity reduced the supply of credit more than other banks. However, higher and better-quality capital mitigated this effect. Our results suggest that strong bank balance sheets are key for the recovery of credit following crises, and provide support for regulatory proposals under the Basel III framework.

Why Did Public Banks Lend More During the Global Financial Crisis?

Joshua Bosshardt,Mr.Eugenio M Cerutti
Why Did Public Banks Lend More During the Global Financial Crisis Book PDF

Author : Joshua Bosshardt,Mr.Eugenio M Cerutti
Publisher : International Monetary Fund
Page : 36 pages
File Size : 48,5 Mb
Release : 2020-06-05
Category : Business & Economics
ISBN : 9781513546049

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Why Did Public Banks Lend More During the Global Financial Crisis? by Joshua Bosshardt,Mr.Eugenio M Cerutti Pdf

During the Global Financial Crisis (GFC), state-owned or public banks lent relatively more than domestic private banks in many countries. However, data limitations have hindered a thorough assessment of what led public banks to better maintain lending during the GFC. Using a novel bank-level dataset covering 25 emerging market economies, we show that public banks lent relatively more during the GFC because they pursued an objective of helping to stabilize the economy, rather than because they had superior fundamentals or access to public or depositors’ funding. Nonetheless, their countercyclical behavior seems unique to the GFC rather than a regular characteristic of public banks before and after the GFC.

Does Going Tough on Banks Make the Going Get Tough? Bank Liquidity Regulations, Capital Requirements, and Sectoral Activity

Ms.Deniz O Igan,Ali Mirzaei
Does Going Tough on Banks Make the Going Get Tough Bank Liquidity Regulations Capital Requirements and Sectoral Activity Book PDF

Author : Ms.Deniz O Igan,Ali Mirzaei
Publisher : International Monetary Fund
Page : 64 pages
File Size : 50,8 Mb
Release : 2020-06-19
Category : Business & Economics
ISBN : 9781513548104

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Does Going Tough on Banks Make the Going Get Tough? Bank Liquidity Regulations, Capital Requirements, and Sectoral Activity by Ms.Deniz O Igan,Ali Mirzaei Pdf

Whether and to what extent tougher bank regulation weighs on economic growth is an open empirical question. Using data from 28 manufacturing industries in 50 countries, we explore the extent to which cross-country differences in bank liquidity and capital levels were related to differences in sectoral activity around the period of the global financial crisis. We find that industries which are more dependent on external finance, in countries where banks had higher liquidity and capital ratios, performed relatively better during the crisis, with regard to investment rates and the creation of new enterprises. This relationship, however, exists only for bank-based systems and emerging market economies. In the pre-crisis period, we find only a marginal link to bank capital. These findings survive a battery of robustness checks and provide some solid support for the tighter prudential measures introduced under Basel III.

French Banks Amid the Global Financial Crisis

Ms.Yingbin Xiao
French Banks Amid the Global Financial Crisis Book PDF

Author : Ms.Yingbin Xiao
Publisher : International Monetary Fund
Page : 24 pages
File Size : 46,6 Mb
Release : 2009-09-01
Category : Business & Economics
ISBN : 9781451873481

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French Banks Amid the Global Financial Crisis by Ms.Yingbin Xiao Pdf

This paper runs the gamut of qualitative and quantitative analyses to examine the performance of French banks during 2006-2008 and the financial support measures taken by the French government. French banks were not immune but proved relatively resilient to the global financial crisis reflecting their business and supervision features. An event study of the impact of government measures on CDS, debt, and equity markets points to the reduction of credit risk and financing cost as well as the redistribution of resources. With the crisis still unfolding, uncertainties remain and challenges lie ahead, calling for continued vigilance and enhanced risk management.

Financial Crises, Liquidity, and the International Monetary System

Jean Tirole
Financial Crises Liquidity and the International Monetary System Book PDF

Author : Jean Tirole
Publisher : Princeton University Press
Page : 166 pages
File Size : 44,8 Mb
Release : 2002-07-01
Category : Business & Economics
ISBN : 9781400828524

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Financial Crises, Liquidity, and the International Monetary System by Jean Tirole Pdf

Once upon a time, economists saw capital account liberalization--the free and unrestricted flow of capital in and out of countries--as unambiguously good. Good for debtor states, good for the world economy. No longer. Spectacular banking and currency crises in recent decades have shattered the consensus. In this remarkably clear and pithy volume, one of Europe's leading economists examines these crises, the reforms being undertaken to prevent them, and how global financial institutions might be restructured to this end. Jean Tirole first analyzes the current views on the crises and on the reform of the international financial architecture. Reform proposals often treat the symptoms rather than the fundamentals, he argues, and sometimes fail to reconcile the objectives of setting effective financing conditions while ensuring that a country "owns" its reform program. A proper identification of market failures is essential to reformulating the mission of an institution such as the IMF, he emphasizes. Next he adapts the basic principles of corporate governance, liquidity provision, and risk management of corporations to the particulars of country borrowing. Building on a "dual- and common-agency perspective," he revisits commonly advocated policies and considers how multilateral organizations can help debtor countries reap enhanced benefits while liberalizing their capital accounts. Based on the Paolo Baffi Lecture the author delivered at the Bank of Italy, this refreshingly accessible book is teeming with rich insights that researchers, policymakers, and students at all levels will find indispensable.