This paper introduces the "Excessive Liquidity Creation Hypothesis," whereby a rise in a bank's core liquidity creation … natural field experiment for testing this hypothesis. Using Berger and Bouwman's (2009) liquidity creation measures, we find … that excessive liquidity creation significantly increased the probability of bank failure during our observation period …

We formulate the “High Liquidity Creation Hypothesis” (HLCH) that a proliferation in the core activity of bank … liquidity creation increases failure probability. We test the HLCH in the context of Russian banking, which provides a natural … field experiment due to numerous failures experienced over the past decade. Using Berger and Bouwman's (2009) liquidity …

This paper introduces the “Excessive Liquidity Creation Hypothesis,” whereby a rise in a bank's core liquidity creation … natural field experiment for testing this hypothesis. Using Berger and Bouwman's (2009) liquidity creation measures, we find … that excessive liquidity creation significantly increased the probability of bank failure during our observation period …

large banks. We show that capital negatively Granger-causes liquidity creation in this industry, where majority of banks are … that Basel III can reduce liquidity creation, but also that greater liquidity creation can reduce banks' solvency. Thus, we …We examine the relation between capital and liquidity creation. This issue is interesting because of the potential …

negative sign of the relationship. The implication is that better capitalized banks tend to create less liquidity, which … liquidity creation. As discussed by Berger and Bouwman (2009), there are two competing hypotheses on this relationship which can …, Russia, provides a natural experiment to investigate this issue. We study three alternative measures of bank liquidity …

use the portfolio approach to assess the optimal risk-return combination of a bank’s portfolio, based on data for 32 … categories of loans. It provides a benchmark for the optimality of the bank’s portfolio. The authors apply this method on an … exhaustive sample of Czech banks for the period January 2005–February 2008. They observe an average excess of risk-taking of 33 …

between capital ratio and bank efficiency for Chinese banks over the period 2004-2009, taking advantage of the profound … the capital ratio on banks’ cost efficiency. We find that such an increase has a positive effect on cost efficiency, the … size of which depends to an extent on the bank’s ownership type. Our results therefore suggest that capital requirements …

was mainly driven by large banks. We show that capital is found to negatively Granger-cause liquidity creation but also …This paper examines the relationship between capital and liquidity creation. This issue is of interest to determine the … potential impact of tighter capital requirements such as those involved in Basel III reforms on liquidity creation. We perform …

This paper introduces the “Excessive Liquidity Creation Hypothesis,” whereby a rise in a bank’s core liquidity creation … natural field experiment for testing this hypothesis. Using Berger and Bouwman’s (2009) liquidity creation measures, we find … that excessive liquidity creation significantly increased the probability of bank failure during our observation period …

large banks. We show that capital negatively Granger-causes liquidity creation in this industry, where majority of banks are … that Basel III can reduce liquidity creation, but also that greater liquidity creation can reduce banks’ solvency. Thus, we …We examine the relation between capital and liquidity creation. This issue is interesting because of the potential …