Liquidity Creation and Bank Capital
Autor: | Barbara Casu, Filippo Di Pietro, Antonio Trujillo-Ponce |
---|---|
Rok vydání: | 2018 |
Předmět: |
040101 forestry
Economics and Econometrics 050208 finance business.industry HB 05 social sciences Net stable funding ratio 04 agricultural and veterinary sciences Monetary economics HG Maturity (finance) Basel III Market liquidity Negative relationship DAW Accounting Capital (economics) 0502 economics and business Capital requirement Economics 0401 agriculture forestry and fisheries business Finance Financial services |
Zdroj: | Journal of Financial Services Research. 56:307-340 |
ISSN: | 1573-0735 0920-8550 |
DOI: | 10.1007/s10693-018-0304-y |
Popis: | This paper aims to evaluate the relationship between capital and liquidity creation following the implementation of the Basel III rules. These regulatory measures target both increased capital ratios and a reduction of banks’ maturity transformation risk, which could result in excessive constraints on bank liquidity creation, thereby negatively affecting economic growth. Using a simultaneous equation model, we find a bi-causal negative relationship, which suggests that banks may reduce liquidity creation as capital increases; and when liquidity creation increases, banks reduce capital ratios. Our results therefore imply a trade-off between financial stability (higher capital, reduced risk) and economic growth (liquidity creation). |
Databáze: | OpenAIRE |
Externí odkaz: |