We investigate how liquidity regulations affect banks by examining a dormant monetary policy tool that functions as a … liquidity regulation. Our identification strategy uses a regression kink design that relies on the variation in a marginal high … credit supply. Liquidity requirements also depress banks' profitability, though some of the regulatory costs are passed on to …

We estimate the effects of the liquidity coverage ratio (LCR), a liquidity requirement for banks, on the tenders that … term deposits qualify for the LCR. These results suggest that liquidity regulation affects bank demand in monetary policy …