This paper identifies a precautionary banking liquidity shock via a set of sign, zero and forecast variance … financial intermediation with credit and liquidity frictions. The precautionary liquidity shock is shown to work through two … restrictions imposed. The shock proxies the reluctance of the banking sector to "lend" to the real economy induced by an exogenous …

This paper identifies a precautionary banking liquidity shock via a set of sign, zero and forecast variance … financial intermediation with credit and liquidity frictions. The precautionary liquidity shock is shown to work through two … restrictions imposed. The shock proxies the reluctance of the banking sector to "lend" to the real economy induced by an exogenous …

conditions, credit default and bank capitalization for the transmission of macroeconomic shocks. We fit the model to euro area … empirical literature, i.e. the pro-cyclicality of bank profitability and the counter-cyclical response of firm default rates and …

results highlight the importance of the starting level of bank capital, bank asset quality, and banks' adjustments for the …

We find that bank liquidity creation (LC) is statistically and economically significantly positively related to real … economic output (GDP). This is robust to using instrumental variables and many robustness checks. LC also beats bank assets in … bank LC generates more GDP per dollar than large bank LC, but large bank LC matters more overall because large banks …

that the US bank holding companies involve in higher magnitude of liquidity creation during the expansion phase (normal … bank holding companies from 1993Q1 to 2020Q1, our results provide the empirical support to the theory that BC has non …-linear effect on liquidity creation. We find a positive and highly significant non-linear effect of BC on liquidity creation, which …

Paycheck Protection Program (PPP). We find that FinTech is disproportionately used in ZIP codes with fewer bank branches, lower …