We examine the relation between capital and liquidity creation. This issue is interesting because of the potential … impact on liquidity creation from tighter capital requirements such as those in Basel III. We perform Granger-causality tests … from 2000 to 2010. We observe a strong expansion in liquidity creation until the financial crisis that was mainly driven by …

This paper introduces the “Excessive Liquidity Creation Hypothesis,” whereby a rise in a bank's core liquidity creation … that excessive liquidity creation significantly increased the probability of bank failure during our observation period … activity increases its probability of failure. Russia experienced many bank failures over the past decade, making it an ideal …

We formulate the “High Liquidity Creation Hypothesis” (HLCH) that a proliferation in the core activity of bank … creation measures as a comprehensive proxy for overall bank output, we find that high liquidity creation significantly … liquidity creation increases failure probability. We test the HLCH in the context of Russian banking, which provides a natural …

This paper introduces the "Excessive Liquidity Creation Hypothesis," whereby a rise in a bank's core liquidity creation … that excessive liquidity creation significantly increased the probability of bank failure during our observation period … activity increases its probability of failure. Russia experienced many bank failures over the past decade, making it an ideal …

swift and massive liquidity provision by central banks in the wake of both crises is, at least partly, to be credited to … previous research on the role of central banks as lenders of last resort in crises and on the real effects of bank lending and … regulation. In part, this is due to their neglect of important regulatory choices, which policy-makers are therefore left to take …

This paper contributes to the debate on the effect of capital requirements on bank effieciency. We study the relation … between capital ratio and bank efficiency for Chinese banks over the period 2004?2009, taking advantage of the profound … size of which depends to an extent on the bank's ownership type. Our results therefore suggest that capital requirements …

, Russia, provides a natural experiment to investigate this issue. We study three alternative measures of bank liquidity … insurance scheme exerts a limited impact on the relationship between bank capital and liquidity creation and does not change the … countries as it suggests that bank capital requirements implemented to support financial stability may harm liquidity creation …

This paper examines how the introduction of deposit insurance influences the relationship between bank capital and … liquidity creation. As discussed by Berger and Bouwman (2009), there are two competing hypotheses on this relationship which can … not have an impact on the relationship between capital and liquidity creation for all banks. However, it influences this …

This paper contributes to the debate on the effect of capital requirements on bank efficiency. We study the relation … between capital ratio and bank efficiency for Chinese banks over the period 2004−2009, taking advantage of the profound … which depends to an extent on the bank's ownership type. Our results therefore suggest that capital requirements can improve …

deposit insurance scheme exerts a limited impact on the relationship between bank capital and liquidity creation and does not … emerging countries as it suggests that bank capital requirements implemented to support financial stability may harm liquidity … creation. JEL classification: G21; G28; G38; P30; P50 Keywords: Bank capital, liquidity creation, deposit insurance, Russia …