The post-crisis world of collateral and international liquidity. A central banker's perspective
International liquidity and collateral management poses a challenge to banks as it needs to adapt to ever-changing circumstances. These circumstances are now in a state of flux because of the financial crisis. Financial market behaviour has changed, the importance of high-quality collateral has increased, new liquidity standards have been designed and central counterparties will assume a greater role in the clearing of over-the-counter derivatives. There is no doubt that these trends will have a profound impact on banks' liquidity and collateral management. This paper examines whether and how infrastructural change or central banks' arrangements can help banks to accommodate these trends. If during a crisis banks have the possibility to promptly transfer securities or cash from one country to another, they may be able to solve an imminent local liquidity problem by using the excess cash or securities that they have elsewhere. Such solutions seem more urgently required now than in the past, because current trends signal a higher need for collateral (so that banks want to use their high-quality assets more efficiently). Moreover, new fast communication technologies require banks to solve local liquidity issues before rumours spread. This paper brings forward some possible solutions and forms a central banker's view on them.
|Date of creation:||Jul 2011|
|Contact details of provider:|| Postal: Postbus 98, 1000 AB Amsterdam|
Web page: http://www.dnb.nl/en/
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:dnb:dnbocs:903. 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: (Rob Vet)
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.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with 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 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.