The Basel 3 Liquidity Coverage Ratio (LCR) is a micro prudential instrument to strengthen the liquidity position of … banks. However if in extreme scenarios the LCR becomes a binding constraint, the interaction of bank behaviour with the … regulatory rule can have negative externalities. We simulate the systemic implications of the LCR by a liquidity stress …

banks' liquidity risk management. Our main question is whether the presence of liquidity regulation substitutes or … substituted by liquidity regulation, a bank's disclosure requirement and size remain significant. A key takeaway from our analysis … complements banks' incentives to hold liquid assets. Our results reveal that in the absence of liquidity regulation, the …

to a liquidity regulation that is very similar to Basel III's Liquidity Coverage Ratio (LCR). We find that most banks …We investigate 62 Dutch banks' liquidity behaviour between January 2004 and March 2010, when these banks were subject … the regulation. More solvent banks hold fewer liquid assets against their stock of liquid liabilities, suggesting an …

policy to mitigate liquidity risk. We inspect the LTD trends and cycles of 11 euro area countries by filtering methods and …

interaction between politicy makers and pressure groups. The second half of the report is devoted to bank regulation. It is argued …This report presents an overview of the theory of regulation in general, with special attention for the regulation of … banks. Two theories of government regulation are described. The first, normative, theory uses market failures as the …

requirements. It extends the Stiglitz-Weiss model of credit rationing to allow for bank default. Bank capital structure then …. Introducing bank financiers, the paper also shows that uninsured funding raises the sensitivity of rationing to capital …

depositors against unexpected liquidity needs, (2) bank runs as an act of collective irrationality by rational depositors, and (3 …The Diamond-Dybvig model provides an explanation for: (1) the existence of banks as a risk sharing agreement between …) the introduction of deposit insurance as an efficient mechanism to prevent bank runs. Extensions of the Diamond …

burden of the banking sector is modest. We model a regulator whose trade-off between bank risk and credit supply is derived … policy. In a dynamic setting, not internalizing bank risk leads a monetary authority to keep rates low for too long after a …This paper shows that a rate hike has countervailing effects on banks' risk appetite. It reduces risk when the debt …

beyond their own risk appetite. Liquidity and capital regulation also seem to incentivize banks to substitute other bonds … analysis suggests that preferential treatment in liquidity and capital regulation increases banks' demand for government bonds …Government bonds receive preferential treatment in financial regulation. The purpose of this paper is to analyze the …

The purpose of this paper is to assess the history of global liquidity regulation until the revised Basel III proposals … in 2013 and to analyze the interaction of capital regulation and banks' liquidity buffers. Our analysis suggests that … regulating capital is associated with declining liquidity uffers. The interaction of liquidity regulation and monetary policy as …