Optimal Liquidity Regulation with Shadow Banking
نویسندگان
چکیده
منابع مشابه
Optimal Banking Regulation with Endogenous Liquidity Provision
In a money-search model where deposits are used as means-of-payments, banks have expertise to obtain higher returns from assets with a cost and an economy of scale but are subject to limited commitment and moral hazard. They can pledge a proportion of asset holdings to issue deposits. Optimal regulation trades off efficiency in assetmanagement and liquidity service banks provide. An optimal cha...
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The liquidity crisis in 2008 sparked interest in the role of regulation that could promote resilience and stability in the banking system. While the Public Interest theory suggests that legal policies could discipline banking activities, the Private Interest theory predicts otherwise, which impairs banking performance. The conflicting theories warrant comprehensive research, especially for Isla...
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Tightening financial regulation squeezes banking activities into the shadow banking sector, which may hurt financial stability and production (Plantin, 2014). Unlike Plantin’s work, we investigate regulations that reduce banks’ leverage and dampen financial amplification effects. Moreover, our paper studies the trade-off between economic growth and financial stability in light of shadow banking...
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During the global financial crisis, banks were under severe pressure to maintain adequate liquidity. This resulted in demands for cash from various sources, including counterparties, short-term creditors, and, especially, existing borrowers. Also, banks were forced to maintain more liquid assets in the event of unexpected future losses that may occur from securities write-downs. This can cause ...
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ژورنال
عنوان ژورنال: SSRN Electronic Journal
سال: 2015
ISSN: 1556-5068
DOI: 10.2139/ssrn.2673540