Background: This study analyzes the impact of non-performing loans (NPLs) on bank liquidity creation to investigate the … techniques have been used for analysis. Results: Total liquidity creation by Chinese banks is declining, and NPLs ratio has … started to increase following a continuous decline between 2005 and 2012. We find that liquidity creation by Chinese banks …

regulatory requirements. Our analytic characterization of the bank policy choices shows that imposing solely liquidity … requirements leads to lower bank losses in default at the cost of an increased likelihood of default. Combining liquidity …We develop a dynamic model of banking to assess the effects of liquidity and leverage requirements on banks' insolvency …