93 posts on "Liquidity"
April 16, 2014
The Liquidity Stress Ratio: Measuring Liquidity Mismatch on Banks’ Balance Sheets
Liquidity transformation—funding longer-term assets with short-term liabilities—is one of the main functions that banks provide. However, this liquidity mismatch exposes banks to liquidity risk.
April 14, 2014
Liquidity Risk, Liquidity Management, and Liquidity Policies
During the 2007-09 financial crisis, banks experienced widespread funding shortages, with shortfalls even hindering adequately capitalized banks.
April 9, 2014
Lunch Anyone? Volatility on the Tokyo Stock Exchange around the Lunch Break on May 23, 2013, and Stock Market Circuit Breakers
Stock market circuit breakers halt trading activity on a single stock or an entire exchange if a sudden large price move occurs.
February 26, 2014
Factors that Affect Bank Stability
Thomas M. Eisenbach and Tanju Yorulmazer In a previous Liberty Street Economics post, we introduced a framework for thinking about the risks banks face. In particular, we distinguished between asset return risk and funding risk that can interact and cause a bank to fail. In our framework, a bank can fail for two reasons:
February 24, 2014
What Makes a Bank Stable? A Framework for Analysis
Thomas M. Eisenbach and Tanju Yorulmazer One of the major roles of banks and other financial intermediaries is to channel funds from savings into valuable projects. In doing so, banks engage in “liquidity and maturity transformation,” since they finance long-term, illiquid projects while funding themselves with short-term, liquid liabilities. By performing this important role, banks […]
October 16, 2013
Dealer Balance Sheet Capacity and Market Liquidity during the 2013 Selloff in Fixed‑Income Markets
Tobias Adrian, Michael J. Fleming, Jonathan E. Goldberg, Morgan Lewis, Fabio M. Natalucci, and Jason J. Wu Long-term interest rates hit record-low levels in 2012 but have since increased substantially. As discussed in an earlier post, the sharpest increase occurred between May 2 and July 5 of this year, with the ten-year Treasury yield rising from 1.63 percent […]
Posted at 7:02 am in Financial Institutions, Financial Markets, Liquidity | Permalink | Comments (3)
January 9, 2013
Ring‑Fencing and “Financial Protectionism” in International Banking
Some market watchers and academic researchers are concerned about a “Balkanization” of banking, owing to a sharp decline in cross-border international banking activity, and an increased home bias of financial transactions.
Posted at 7:00 am in Banks, Financial Institutions, International Economics, Liquidity, Regulation | Permalink
November 7, 2012
Federal Reserve Liquidity Facilities Gross $22 Billion for U.S. Taxpayers
During the 2007-09 crisis, the Federal Reserve took many measures to mitigate
disruptions in financial markets, including the introduction or expansion of
liquidity facilities.
Posted at 7:00 am in Fed Funds, Financial Markets, Liquidity, Monetary Policy | Permalink | Comments (3)
August 29, 2012
Follow That Money! How Global Banks Manage Liquidity Globally
Banks increasingly move money around the world.
August 20, 2012
The Fed’s Emergency Liquidity Facilities during the Financial Crisis: The CPFF
This is the first post in a series that details the steps taken by the Fed in its role as lender of last resort during the 2007-09 financial crisis.
Posted at 9:48 am in Fed Funds, Financial Markets, Liquidity, Monetary Policy, Nonbank (NBFI) | Permalink
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