We study how banks' capital level affects the extent to which they engage in liquidity transformation. We first …-ons. We find that banks engage in less liquidity transformation when their capital increases, which suggests that capital and … banks. These results have interesting implications for the optimal joint calibration of capital and liquidity requirements …

their liquidity buffers from 1976 to the 2008 crisis. Diversified banks also hold more illiquid small business loans, less … liquid mortgages, and have higher net liquidity creation. During the crisis, however, better diversified banks hoard more …This paper shows that US banks' increased geographic diversification is an important explanation for the decline of …

We examine how banks' cross-border lending reacts to changes in liquidity regulation using a new dataset on Individual …. A one percentage point increase in liquidity requirements to total assets reduces UK resident banks' cross … Liquidity Guidance (ILG), which was enacted in the UK from 2000 to 2015 and is similar to the Basel III Liquidity Coverage Ratio …

asset class on banks' balance sheets — they do not take into account bias arising from small samples or non-Gaussian risk …

liquidity in the Bank of England's (BoE) operations. Between 2010 and 2016 there was regular usage of two BoE facilities … facilities to meet their liquidity needs. Collateral assets used for FLS are less liquid, since almost all assets are loan … not subsequently draw upon FLS more than others do. Overall, our study points to no systemic misincentives; rather banks …

requirements has been a reduction in the liquidity of fixed income markets. We assess this claim in the context of the gilt (UK … government bond) and gilt repo markets. We find that gilt repo liquidity worsened during the period when UK leverage ratio policy … was announced, and that gilt liquidity worsened conditional on factors such as funding costs and inventory risk. We also …

regulation in a developed insurance market. Using proprietary data on insurance risk exposures from the Bank of England, we …

The regulation of bank capital to improve the resilience of the financial system and, related to this aim, as a means … regulation to be effective in controlling the aggregate supply of credit: (i) changes in capital requirements need to affect loan … supply by regulated banks, and (ii) substitute sources of credit should not fully offset changes in credit supply by affected …

date, we show that less profitable banks reduced their systemic importance as intended by regulation. Those close to the … banks’ responses to higher capital requirements. We present a stylised model to formalise this insight and test our … treatment – shrunk by even more. In contrast, more profitable banks continued to expand …

We use a DSGE model with financial frictions, leverage limits on banks, loan to value (LTV) limits and debt …