to liquidity assistance as a solution to forbearance. Faced with a bank that chooses capital and liquidity, the … institution providing liquidity assistance can commit to a mixed strategy: never bailing out is too costly and therefore not … credible, while always bailing out causes moral hazard. In equilibrium, the bank chooses above minimum capital and liquidity …

The traditional theory of commercial banking explains maturity transformation and liquidity provision assuming no … Commission on Banking (2011), chaired by Sir John Vickers. …

adequacy requirements, privately rational but socially inefficient disintermediation, and competitive international de-regulation … global liquidity creation by key central banks and, second, an ex-ante global saving glut, brought about by the entry of a … England’s liquidity management, regulatory failure of the FSA, an inadequate deposit insurance arrangement and deficient …

-of-last-resort and market-maker-of-last-resort roles, providing liquidity to financially distressed and illiquid financial institutions … of liquidity and the Treasury’s solvency support for systemically important financial institutions. All activities of the …

This paper seeks to understand the interplay between banks, bank regulation, sovereign default risk and central bank … in other “safe” countries will impose tighter regulation. As a result, governments in risky countries get to borrow more …

During the recent financial crisis, central banks have provided liquidity and governments have set up rescue programmes … bank suffering from liquidity shocks, we find that the unregulated bank keeps too much liquidity and monitors too little. A … central bank can alleviate the liquidity problem, but induces moral hazard. Therefore, we introduce an additional authority …

Can banks maintain their advantage as liquidity providers when they are heavily exposed to a financial crisis? The … deposit rates and inflows during the 2007-09 crisis. Our results indicate that the role of the banking system as a stabilizing … liquidity insurer is not one of the passive recipient, but of an active seeker, of deposits. We find that banks facing a funding …

Banking regulation has proven to be inadequate to guard systemic stability in the recent financial crisis. Central … banks have provided liquidity and ministries of finance have set up rescue programmes to restore confidence and stability …. Using a model of a systemic bank suffering from liquidity shocks, we find that the unregulated bank keeps too much liquidity …

In August of 2007, banks faced a freeze in funding liquidity from the asset-backed commercial paper (ABCP) market. We … investigate how banks scrambled for liquidity in response to this freeze and its implications for the real economy. Commercial … packages denominated in dollars. The results point to a funding risk in global banking, manifesting as currency shortages for …