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 …

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 … sector's assets (e.g., by limiting competition in bank lending) will mitigate the commitment problem. If the value of the …

consider liquidity regulation to be binding. Bank- and country-specific characteristics also matter. Liquid balance sheets and …We measure market reactions to announcements concerning liquidity regulation, a key innovation in the Basel framework …. Our initial results show that liquidity regulation attracts negative abnormal returns. However, the price responses are …