regulatory liquidity requirements on bank behavior. A multi-stage decision situation allows for considering the interaction … between credit risk and liquidity risk of banks. This interaction is found to make a risk neutral bank behave as if it were … risk averse in an environment where there is no interbank market and liquidity regulation. Introducing a buoyant interbank …

We examine liquidity creation per unit of assets by banks subject to the Liquidity Coverage Ratio (LCR) using the … liquidity measures Liquidity Mismatch Index (LMI) (Bai et al., 2018) and BB (Berger and Bouwman, 2009). We identify the LCR …. We find that, since 2013, there has been reduced liquidity creation by LCR banks compared to non-LCR banks, occurring …

circumstances. The Bank fully supports this approach. However, this will increase the cost of intraday liquidity and so could create …Banks require access to liquidity intraday in order to settle obligations in payment and settlement systems. The recent … financial crisis has highlighted the need for banks to improve their liquidity risk management, including the management of …

Post-crisis bank regulations raised market-making costs for bank-affiliated dealers. We show that this can, somewhat … surprisingly, improve overall investor welfare and reduce average transaction costs despite the increased cost of immediacy. Bank … dealers in OTC markets optimize between two parallel trading mechanisms: market making and matchmaking. Bank regulations that …