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How financial intermediation impacts on financial stability?

Author

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  • José Américo Pereira Antunes
  • Claudio Oliveira De Moraes
  • Adriano Rodrigues

Abstract

The great financial crisis widened the role of financial intermediation in financial stability. This study develops a new financial intermediation variable, credit cash flow (CCF), which enables measurement of the net financial flow resulting from loan activity. An analysis provides evidence that CCF affects the capital buffer via credit gap behaviour, thus indicating the existence of a channel between the CCF and the capital buffer. Such a link offers the policy-maker the possibility to monitor the behaviour of financial intermediation carried out by banks, in order to avoid the outbreak of financial instability events.

Suggested Citation

  • José Américo Pereira Antunes & Claudio Oliveira De Moraes & Adriano Rodrigues, 2018. "How financial intermediation impacts on financial stability?," Applied Economics Letters, Taylor & Francis Journals, vol. 25(16), pages 1135-1139, September.
  • Handle: RePEc:taf:apeclt:v:25:y:2018:i:16:p:1135-1139
    DOI: 10.1080/13504851.2017.1400647
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    Cited by:

    1. Ahmed, Walid M.A., 2020. "Stock market reactions to domestic sentiment: Panel CS-ARDL evidence," Research in International Business and Finance, Elsevier, vol. 54(C).
    2. Ozili, Peterson K, 2023. "Effect of gender equality on financial stability and financial inclusion," MPRA Paper 117805, University Library of Munich, Germany.

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