We find that banks subject to the Liquidity Coverage Ratio (LCR) create less liquidity per dollar of assets in the post-LCR period than banks not subject to the LCR, in part because LCR banks make fewer loans. However, we also find that LCR banks are more resilient, as they contribute less to...

Pierret (2015) presents empirical analysis of the solvency-liquidity nexus for the banking system, documenting that a shock to the level of banks' solvency risk is followed by lower short-term debt. Conversely, higher short-term debt Granger-causes higher solvency risk. These results point...