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Liquidity Risk under The New Basel Global Regulatory Framework

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  • Sviatlana Hlebik

Abstract

This paper contributes to understanding liquidity risk and its role in systemic financial crises. It focuses on the new banking regulation Basel III, in particularly on the Liquidity risk ratio that measures long-term liquidity positions of European banks. It emphasizes the importance and the issues relating to the Net Stable Funding Ratio (NSFR) which will become a minimum standard by 1 January 2018. Application at a level of 100% to credit institutions and systemic investment firms is not however expected before 2020, two years after the date of entry into force of the proposed Regulation. The paper aims to analyze the relationship between NSFR and banking stability, financial markets factors and central bank operations, in order to understand the potential impact of the key components of the new Basel global regulatory framework.

Suggested Citation

  • Sviatlana Hlebik, 2017. "Liquidity Risk under The New Basel Global Regulatory Framework," Applied Economics and Finance, Redfame publishing, vol. 4(6), pages 78-90, November.
    • Handle: RePEc:rfa:aefjnl:v:4:y:2017:i:6:p:78-90
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    References listed on IDEAS

    as
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    banks; basel III; net stable funding ratio; liquidity risk; banking regulation;
    All these keywords.

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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