Bank Liquidity Creation and Financial Crises book cover

Bank Liquidity Creation and Financial Crises

New Perspectives

Financial crises and bank liquidity creation are often connected. Liquidity creation fuels economic growth, but excess liquidity creation may lead to asset bubbles that can burst and propagate financial crises. Bank Liquidity Creation and Financial Crises delivers a consistent and logical presentation of liquidity creation, connecting regulatory measures with this novel benchmarking tool. Authors Allen Berger and Christa Bouwman examine ways to measure liquidity creation, how much liquidity banks create in different countries, differences among five financial crises that occurred over the past three decades and normal times, the effects of monetary policy (including interest rate policy, lender of last resort, and quantitative easing), the effects of capital, the effects of regulatory interventions, and the effects of bailouts.  No advanced, specialized academic knowledge is needed to understand the concept of liquidity creation. Narrowing the gap between the "academic world," focused on theories, and the "practitioner world," dedicated to solving real-world problems, Bank Liquidity Creation and Financial Crises offers a new tool for evaluating a bank’s performance over time and comparing it to its peer group.

Audience
Upper-division undergraduates, graduate students, and professionals worldwide working in banking, financial intermediation, and regulation, especially in respect to financial crises 

Hardbound, 320 Pages

Published: November 2014

Imprint: Academic Press

ISBN: 978-0-12-800233-9

Contents

    1. What is Bank Liquidity Creation and How does it Differ from Bank Liquidity?
    2. How to Measure Bank Output?
    3. How to Identify Financial Crises
    4. How Much Liquidity Do Banks Create During Normal Times and Financial Crises?
    5. Do Better-Capitalized Banks Create More or Less Liquidity?
    6. What are the Other Characteristics of Banks that Create More or Less Liquidity?
    7. Do Banks that Create More Liquidity Perform Better or Worse?
    8. How Will Basel III Affect Bank Liquidity Creation?
    9. Do Other Government Policies and Actions Affect Bank Liquidity Creation During Normal Times and Financial Crises?
    10. How Can Bank Executives, Regulators, Policy Makers, Financial Analysts, and Researchers Use Liquidity Creation Data to Their Advantage?
    11. What Are the Important Open Research Questions?

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