Rights statement: This is the author’s version of a work that was accepted for publication in Journal of Financial Intermediation. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in Journal of Financial Intermediation, 26, 2016 DOI: 10.1016/j.jfi.2016.01.001
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Final published version
Research output: Contribution to Journal/Magazine › Journal article › peer-review
Research output: Contribution to Journal/Magazine › Journal article › peer-review
}
TY - JOUR
T1 - Bank liquidity creation following regulatory interventions and capital support
AU - Berger, Allen N.
AU - Bouwman, Christa H. S.
AU - Kick, Thomas
AU - Schaeck, Klaus
N1 - This is the author’s version of a work that was accepted for publication in Journal of Financial Intermediation. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in Journal of Financial Intermediation, 26, 2016 DOI: 10.1016/j.jfi.2016.01.001
PY - 2016/4
Y1 - 2016/4
N2 - 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.
AB - 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.
KW - Liquidity creation
KW - Bank distress
KW - Regulatory interventions
KW - Capital support
KW - Bank bailouts
U2 - 10.1016/j.jfi.2016.01.001
DO - 10.1016/j.jfi.2016.01.001
M3 - Journal article
VL - 26
SP - 115
EP - 141
JO - Journal of Financial Intermediation
JF - Journal of Financial Intermediation
SN - 1042-9573
ER -