Liquidity in resolution : estimating possible liquidity gaps for specific banks in resolution and in a systemic crisis

Raschid Amamou, Andreas Baumann, Dimitrios Chalamandaris, Laura Parisi, Pär Torstensson

This paper contributes to the debate on liquidity in resolution by providing a quantitative assessment of liquidity gaps of banks in resolution in the euro area. It estimates possible ranges of liquidity gaps for significant banks under different assumptions and scenarios. The findings suggest that, while the average liquidity gaps in resolution are limited, the averages hide significant outliers. The paper thus shows that, under adverse circumstances, the instruments currently available to provide liquidity support to financial institutions in the euro area would be insufficient.

MoreLess

Year of publication:	[November 2020]
Authors:	Amamou, Raschid ; Baumann, Andreas ; Chalamandaris, Dimitrios ; Parisi, Laura ; Torstensson, Pär
Publisher:	Frankfurt am Main, Germany : European Central Bank
Subject:	Liquidity \| resolution \| bank runs \| systemic crisis \| contagion \| Monte Carlo simulations \| Bankenkrise \| Banking crisis \| Bankenliquidität \| Bank liquidity \| Finanzkrise \| Financial crisis \| Liquidität \| Monte-Carlo-Simulation \| Monte Carlo simulation \| Bankinsolvenz \| Bank failure \| Ansteckungseffekt \| Contagion effect \| Bankenregulierung \| Bank regulation \| Theorie \| Theory