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Bank Liquidity Hording and Financial Crisis: An Empirical Evaluation

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Product Code: 9781503219984
ISBN13: 9781503219984
Condition: New
$15.75

Bank Liquidity Hording and Financial Crisis: An Empirical Evaluation

$15.75
 
The Federal Reserve Board tested and found supporting evidence for the precautionary motive hypothesis of liquidity hoarding for U.S. commercial banks during the recent financial crisis. They also found that banks held more liquid assets in anticipation of future losses from securities write-downs. Exposure to securities losses in their investment portfolios and expected loan losses (measured by loan loss reserves) represent key measures of banks' on-balance sheet risks, in addition to off-balance sheet liquidity risk stemming from unused loan commitments. Furthermore, unrealized securities losses and loan loss reserves seem to better capture the risks stemming from banks' asset management and provide supporting evidence for the precautionary nature of liquidity hoarding. Moreover, also found that more than one-fourth of the reduction in bank lending during the crisis is due to the precautionary motive.


Author: Federal Reserve Board
Publisher: Createspace Independent Publishing Platform
Publication Date: Nov 14, 2014
Number of Pages: 42 pages
Binding: Paperback or Softback
ISBN-10: 1503219984
ISBN-13: 9781503219984
 

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