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 analyze how the inflow of liquidity through TARP funds in the wake of the 2007/2008 financial crisis impacted banks …

entropy, closest matching and random matching. Contagion occurs through liquidity hoarding, interbank interlinkages and fire … the stability/efficiency trade-off. Liquidity requirements unequivocally decrease systemic risk but at the cost of lower …

illiquid assets or underprovision of liquidity. We investigate whether imperfect competition (Cournot) improves welfare through … internalizing the externality and find that this is far from guaranteed. In a standard model of liquidity shocks, when liquidity is … sufficiently scarce, Cournot competition leads to even less liquidity than the Walrasian equilibrium. In a standard model of …

This paper discusses liquidity regulation when short-term funding enables credit growth but generates negative systemic … containing risk and preserving credit quality, while quantity-based fundingratios are distorsionary. Liquidity buffers are either … overconfidence), excess credit and liquidity risk are best controlled with net fundingratios. Taxes on short-term funding emerge …

liquidity shock. We show that discretionary decisions about emergency liquidity assistance result in either excessively small or … excessively large liquidity injections in a wide variety of circumstances. Also, adding a lender of last resort does not generally … preferences by either subsidizing or taxing liquidity aid …

We show that the regulation of bank lending practices is necessary for the optimal provision of private liquidity. In … system nor narrow banking can provide the socially efficient amount of liquidity. If the bankers provided such an amount …

This study investigates spillover effects of banks' liquidity risk control on the real economy by using the … introduction of the Basel III liquidity regulation as shocks to banks. Since the Basel Committee's endorsement of this regulation … in 2010, banks exposed to high liquidity risk have significantly reduced the proportion of loans in their portfolio. In …

This paper contributes to the debate on liquidity in resolution by providing a quantitative assessment of liquidity … gaps of banks in resolution in the euro area. It estimates possible ranges of liquidity gaps for significant banks under … different assumptions and scenarios. The findings suggest that, while the average liquidity gaps in resolution are limited, the …

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 …