Bank liquidity, macroeconomic risk, and bank risk: Evidence from the Financial Services Modernization Act
| Autor: | Yong‐Chin Liu, I‐Ju Chen, Yu‐Yi Lee |
|---|---|
| Rok vydání: | 2019 |
| Předmět: |
040101 forestry
050208 finance business.industry 05 social sciences Financial system 04 agricultural and veterinary sciences Liquidity risk Modernization theory Market liquidity Bank risk Environmental risk Accounting 0502 economics and business 0401 agriculture forestry and fisheries Business Empirical relationship General Economics Econometrics and Finance Financial services |
| Zdroj: | European Financial Management. 26:143-175 |
| ISSN: | 1468-036X 1354-7798 |
| DOI: | 10.1111/eufm.12208 |
| Popis: | We investigate the empirical relationship between macroeconomic risk, bank liquidity, and bank risk surrounding the 1999 Financial Services Modernization Act. We propose that bank risk and liquidity are positively related as macroeconomic risk increases, and that this effect is particularly strong after the Gramm–Leach–Bliley Act (GLBA). We test our hypotheses by collecting data from 1994 to 2006 for banks in the United States. The results show that banks flush with liquid assets in a high macroeconomic risk environment conducted more lending activities following the enactment of the GLBA, leading to higher bank risk. Our study complements the understanding of bank liquidity management. |
| Databáze: | OpenAIRE |
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