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Micro- and Macroprudential Liquidity Standards and Their Effects (Mikro- i makroostroznosciowe standardy plynnosci bankow i ich skutki)

Author

Listed:
  • Malgorzata Olszak

    (Uniwersytet Warszawski, Wydzial Zarzadzania, Zaklad Bankowosci i Rynkow Pienieznych)

  • Filip Switala

    (Uniwersytet Warszawski, Wydzial Zarzadzania, Zaklad Gospodarki Rynkowej)

Abstract

This article focuses on liquidity standards whose significance has risen since the recent crisis of 2007/2008. The analysis concentrates on two areas. The first one is identification of common characteristics of liquidity standards recommended in Basel III and provisions included in directives and regulations in the European Union, as well as common traits of Polish supervisory liquidity rules and Basel III standards in this field. The other is identification of effects of liquidity standards. Analysis of Polish supervisory liquidity standards leads to conclusion that they have their counterparts in liquidity standards recommended by the Basel Committee. Simulations conducted by the Bank for International Settlements show that implementation of liquidity standards will bring more benefits than losses, for both banking (and financial) sector and the real economy. Unfortunately, contemporary empirical research only explains what are the effects of application of reserve requirements used in monetary policy. So little is known about the effects of other instruments whose track record is relatively short. However, even this scant evidence seems to support the prediction that reserve requirements could potentially be applied as a tool stabilizing financial sector and diminishing systemic risk.

Suggested Citation

  • Malgorzata Olszak & Filip Switala, 2018. "Micro- and Macroprudential Liquidity Standards and Their Effects (Mikro- i makroostroznosciowe standardy plynnosci bankow i ich skutki)," Problemy Zarzadzania, University of Warsaw, Faculty of Management, vol. 16(72), pages 116-149.
    • Handle: RePEc:sgm:pzwzuw:v:16:i:72:y:2018:p:116-149
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    More about this item

    Keywords

    liquidity standards; financial stability; macroprudential policy; regulations;
    All these keywords.

    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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