The recent financial crisis has revived interest in the question of what triggers crashes and meltdowns in financial markets. An important reason for abrupt and large price dislocations is the lack or ‘slow motion’ of arbitrage capital (Duffie 2010) that weakens the risk-bearing capacity of liquidity providers.
Persistent noise, investors’ expectations, and market meltdowns
Giovanni Cespa, Xavier Vives, 22 April 2014
Recent studies reinforce the case for the Liquidity Coverage Ratio
Stefan W Schmitz, Heiko Hesse, 28 February 2014
With the underpricing of liquidity risk prior to the crisis, a return to the same pre-crisis liquidity pattern is not expected. There is widespread consensus that banks’ extensive pre-crisis reliance on deep and broad unsecured money markets is to be avoided in the future (see e.g. IMF 2013).
A call for liquidity stress testing and why it should not be neglected
Clemens Bonner, 6 February 2014
The recent financial crisis has shown that neglecting liquidity risks comes at substantial costs. In order to reinforce banks’ resilience to liquidity risks, the Basel Committee on Banking Supervision (BCBS) proposed the introduction of two harmonised liquidity standards:
The determinants of banks’ liquidity buffers and the role of liquidity regulation
Clemens Bonner, Iman van Lelyveld, Robert Zymek, 1 November 2013
Until recently, liquidity risk was not the main focus of banking regulators. However, the 2007–2009 crisis showed how rapidly market conditions can change, exposing severe liquidity risks for some institutions. Although capital buffers were effective in reducing liquidity stress to some extent, they were not always sufficient.
The impact of liquidity regulation on monetary-policy implementation
Clemens Bonner, Sylvester Eijffinger, 14 October 2013
In response to the recent financial crisis, the Basel Committee on Banking Supervision has drafted a new regulatory framework (henceforth Basel III) with the aim to achieve a more robust banking system. While it also tightens the existing requirements for capital, the proposal stands out as it is the first to attempt harmonised liquidity regulation across the globe.
Enhancing the global financial safety net through central-bank cooperation
Edwin M. Truman, 10 September 2013
The prospect that the Federal Reserve will soon ease off on its purchases of long-term assets has increased financial-market uncertainty and contributed to a retrenchment in global capital flows. This turbulence has revived discussion of the need to enhance the global financial safety net –i.e.
Global factors in capital flows and credit growth
Valentina Bruno, Hyun Song Shin, 7 June 2013
It is a cliché that the world has become more connected, but the financial crisis and the boom that preceded it have focused attention on the global factors behind credit growth and capital flows.
Stock market turnover and corporate governance
Alex Edmans, Vivian W Fang, Emanuel Zur, 16 February 2013
The stock market is a powerful tool for controlling corporation’s behaviour. But what is best:
Basel liquidity rules and their impact on the interbank money market
Clemens Bonner, Sylvester Eijffinger, 13 October 2012
Before the financial crisis in 2008, asset markets were liquid and funding was easily available at low cost.
2nd MoFiR Workshop on Banking
7 - 8 March 2013, Ancona (Italy)The aim of the 2nd MoFiR Workshop on Banking is to bring together scholars in banking and finance to discuss the causes, transmission mechanisms, and consequences of the crisis, focusing also on the policy implications for the current situation and the potential reforms. The organizing committee invites the submission of full papers or extended abstracts on the following themes: • Financial sector fragility, contagion, safety nets, and crises; • The (dis-)advantages of cross-border banking; • Liquidity management and provision by financial intermediaries; • Banks’ organizational models, informational asymmetries and distance; • Bank lending, entrepreneurial finance and firm growth; • Experiments in banking.
- Andrea F. Presbitero
- Ancona (Italy)
- Open attendance
- Università Politecnica delle Marche and MoFiR
- More information:
Disclaimer: Vox is not responsible for the accuracy of this information.
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