We examine the relation between capital and liquidity creation. This issue is interesting because of the potential … impact on liquidity creation from tighter capital requirements such as those in Basel III. We perform Granger-causality tests … from 2000 to 2010. We observe a strong expansion in liquidity creation until the financial crisis that was mainly driven by …

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 …

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 …

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 … insurance scheme exerts a limited impact on the relationship between bank capital and liquidity creation and does not change the …

liquidity creation. As discussed by Berger and Bouwman (2009), there are two competing hypotheses on this relationship which can … not have an impact on the relationship between capital and liquidity creation for all banks. However, it influences this … on liquidity creation. This finding has important policy implications as it suggests that deposit insurance and capital …

liquidity creation. As discussed by Berger and Bouwman (2009), there are two competing hypothes-es on this relationship which … liquidity creation and perform estimations on a large set of Russian banks. Our findings suggest that the introduction of the … deposit insurance scheme exerts a limited impact on the relationship between bank capital and liquidity creation and does not …