IDEAS home Printed from https://ideas.repec.org/a/eee/jfinin/v26y2016icp115-141.html
   My bibliography  Save this article

Bank liquidity creation following regulatory interventions and capital support

Author

Listed:
  • Berger, Allen N.
  • Bouwman, Christa H.S.
  • Kick, Thomas
  • Schaeck, Klaus

Abstract

We study the effects of regulatory interventions and capital support (bailouts) on banks’ liquidity creation. We rely on instrumental variables to deal with possible endogeneity concerns. Our key findings, which are based on a unique supervisory German dataset, are that regulatory interventions robustly trigger decreases in liquidity creation, while capital support does not affect liquidity creation. Additional results include the effects of these actions on different components of liquidity creation, lending, and risk taking. Our findings provide new and important insights into the debates about the design of regulatory interventions and bailouts.

Suggested Citation

  • Berger, Allen N. & Bouwman, Christa H.S. & Kick, Thomas & Schaeck, Klaus, 2016. "Bank liquidity creation following regulatory interventions and capital support," Journal of Financial Intermediation, Elsevier, vol. 26(C), pages 115-141.
  • Handle: RePEc:eee:jfinin:v:26:y:2016:i:c:p:115-141
    DOI: 10.1016/j.jfi.2016.01.001
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1042957316000024
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Schupp, Fabian & Silbermann, Leonid, 2017. "The role of structural funding for stability in the German banking sector," Discussion Papers 03/2017, Deutsche Bundesbank.
    2. Kick, Thomas & Kreiser, Swetlana & Merkl, Christian, 2018. "Loan supply and bank capital: A micro-macro linkage," FAU Discussion Papers in Economics 04/2018, Friedrich-Alexander University Erlangen-Nuremberg, Institute for Economics.
    3. repec:eee:finana:v:53:y:2017:i:c:p:48-65 is not listed on IDEAS
    4. Götz, Martin R. & Tröger, Tobias H., 2017. "Fines for misconduct in the banking sector: What is the situation in the EU?," SAFE White Paper Series 47, Goethe University Frankfurt, Research Center SAFE - Sustainable Architecture for Finance in Europe.
    5. Guizani, Brahim & Watanabe, Wako, 2016. "The effects of public capital infusions on banks’ risk-shifting to the deposit insurance system in Japan," Journal of Financial Stability, Elsevier, vol. 26(C), pages 15-30.
    6. repec:eee:jbfina:v:79:y:2017:i:c:p:57-73 is not listed on IDEAS
    7. Davydov, Denis & Fungáčová, Zuzana & Weill, Laurent, 2017. "Cyclicality of bank liquidity creation," BOFIT Discussion Papers 5/2017, Bank of Finland, Institute for Economies in Transition.
    8. Francesco Marchionne & Beniamino Pisicoli & Michele Fratianni, 2017. "Regulation, financial crises, and liberalization traps," Mo.Fi.R. Working Papers 143, Money and Finance Research group (Mo.Fi.R.) - Univ. Politecnica Marche - Dept. Economic and Social Sciences.
    9. repec:ura:ecregj:v:1:y:2018:i:1:p:303-314 is not listed on IDEAS
    10. Alin-Marius ANDRIEȘ & Florentina IEȘAN-MUNTEAN & Simona NISTOR, 2016. "The effectiveness of policy interventions in CEE countries," Eastern Journal of European Studies, Centre for European Studies, Alexandru Ioan Cuza University, vol. 7, pages 93-124, June.
    11. repec:gam:jsusta:v:10:y:2018:i:9:p:3142-:d:167479 is not listed on IDEAS
    12. Simón Sosvilla-Rivero & Victor Echevarria Icaza, 2017. "Systemic banks, capital composition and CoCo bonds issuance:The effects on bank risk," Working Papers 17-03, Asociación Española de Economía y Finanzas Internacionales.
    13. repec:eee:jbfina:v:82:y:2017:i:c:p:203-216 is not listed on IDEAS
    14. repec:eee:finsta:v:32:y:2017:i:c:p:86-98 is not listed on IDEAS
    15. Pierpaolo GIANNOCCOLO & José Manuel MANSILLA-FERNÁNDEZ, 2017. "Bank Restructuring, Competition, and Lending Supply: Evidence from the Spanish Banking Sector," Departmental Working Papers 2017-16, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano.
    16. Maaike Diepstraten & Carin van der Cruijsen, 2017. "To stay or go? Consumer bank switching behaviour after government interventions," DNB Working Papers 550, Netherlands Central Bank, Research Department.
    17. Deli, Yota & Delis, Manthos D. & Hasan, Iftekhar & Liu, Liuling, 2016. "Bank enforcement actions and the terms of lending," Research Discussion Papers 23/2016, Bank of Finland.
    18. repec:eee:jbfina:v:87:y:2018:i:c:p:411-426 is not listed on IDEAS
    19. William Bassett & Selva Demiralp & Nathan Lloyd, 2016. "Government Support of Banks and Bank Lending," Koç University-TUSIAD Economic Research Forum Working Papers 1611, Koc University-TUSIAD Economic Research Forum.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jfinin:v:26:y:2016:i:c:p:115-141. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dana Niculescu). General contact details of provider: http://www.elsevier.com/locate/inca/622875 .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.