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Market liquidity and financial stability

Author

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  • Crockett, A.

Abstract

Stability in financial institutions and in financial markets are closely intertwined. Banks and other financial institutions need liquid markets through which to conduct risk management. And markets need the back-up liquidity lines provided by financial institutions. Market liquidity depends not only on objective, exogenous factors, but also on endogenous market dynamics. Central banks responsible for systemic stability need to consider how far their traditional responsibility for the health of the banking system needs to be adapted to promote stability in the relevant financial markets.

Suggested Citation

  • Crockett, A., 2008. "Market liquidity and financial stability," Financial Stability Review, Banque de France, issue 11, pages 13-17, February.
  • Handle: RePEc:bfr:fisrev:2008:11:3
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    Citations

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    Cited by:

    1. Nabi, Mahmoud Sami, 2012. "Dual Banking and Financial Contagion," Islamic Economic Studies, The Islamic Research and Training Institute (IRTI), vol. 20, pages 29-54.
    2. Mikhail V. Oet & John M. Dooley & Stephen J. Ong, 2015. "The Financial Stress Index: Identification of Systemic Risk Conditions," Risks, MDPI, vol. 3(3), pages 1-25, September.
    3. Michel Aglietta & Laurence Scialom, 2009. "Permanence and Innovation in Central Banking Policy for Financial Stability," Palgrave Macmillan Books, in: Robert R. Bliss & George G. Kaufman (ed.), Financial Institutions and Markets, chapter 8, pages 187-211, Palgrave Macmillan.
    4. Boško Živković & Jelena Minović, 2010. "Illiquidity of Frontier Financial Market: Case of Serbia," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 57(3), pages 349-367, September.
    5. Tarnoczi Tibor & Fenyves Veronika, 2011. "Liquidity Management And Corporate Risk," Annals of Faculty of Economics, University of Oradea, Faculty of Economics, vol. 1(1), pages 530-536, July.
    6. Sekoni, Abiola, 2015. "The Basic Concepts and Feature of Bank Liquidity and Its Risk," MPRA Paper 67389, University Library of Munich, Germany.
    7. Elisabetta Gualandri & Andrea Landi & Valeria Venturelli, 2009. "Financial Crisis And New Dimensions Of Liquidity Risk: Rethinking Prudential Regulation And Supervision," Centro Studi di Banca e Finanza (CEFIN) (Center for Studies in Banking and Finance) 0013, Universita di Modena e Reggio Emilia, Dipartimento di Economia "Marco Biagi".
    8. Jana Lastuvkova, 2015. "Dimensions of liquidity and their factors in the Slovenian banking sector," MENDELU Working Papers in Business and Economics 2015-55, Mendel University in Brno, Faculty of Business and Economics.
    9. Jelena Minovic, 2011. "Liquidity Measuring of Financial Market in Western Balkan Region: The Case of Serbia," Book Chapters, in: Stefan Bogdan Salej & Dejan Eric & Srdjan Redzepagic & Ivan Stosic (ed.), Contemporary Issues in the Integration Processes of Western Balkan Countries in the European Union, chapter 27, pages 443-459, Institute of Economic Sciences.
    10. Paata KUNCHULIA & Gocha TUTBERIDZE, 2011. "The Georgian Banking System’S In Post-Crisis Period," Internal Auditing and Risk Management, Athenaeum University of Bucharest, vol. 24(4), pages 115-125, december.
    11. Anastasia Nesvetailova, 2015. "A Crisis of the Overcrowded Future: Shadow Banking and the Political Economy of Financial Innovation," New Political Economy, Taylor & Francis Journals, vol. 20(3), pages 431-453, June.

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