The Transmission of Liquidity Shocks: The Role of Internal Capital Markets and Bank Funding Strategies
We analyze the transmission of bank-specific liquidity shocks triggered by a credit rating downgrade through the lending channel. Using bank-level data for US Bank Holding Companies, we find that a credit rating downgrade is associated with an immediate and persistent decline in access to non-core d...
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Format: | Elektronisch E-Book |
Sprache: | English |
Veröffentlicht: |
Washington, D.C
International Monetary Fund
2014
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Schriftenreihe: | IMF Working Papers
Working Paper No. 14/207 |
Online-Zugang: | UBW01 UEI01 LCO01 SBR01 UER01 SBG01 UBG01 FAN01 UBT01 FKE01 UBY01 UBA01 FLA01 UBM01 UPA01 UBR01 FHA01 FNU01 BSB01 TUM01 Volltext |
Zusammenfassung: | We analyze the transmission of bank-specific liquidity shocks triggered by a credit rating downgrade through the lending channel. Using bank-level data for US Bank Holding Companies, we find that a credit rating downgrade is associated with an immediate and persistent decline in access to non-core deposits and wholesale funding, especially during the global financial crisis. This translates into a reduction in lending to households and non-financial corporates at home and abroad. The effect on domestic lending, however, is mitigated when banks (i) hold a larger buffer of liquid assets, (ii) diversify away from rating-sensitive sources of funding, and (iii) activate internal liquidity support measures. Foreign lending is significantly reduced during a crisis at home only for subsidiaries with weak funding self-sufficiency |
Beschreibung: | 1 Online-Ressource (38 p) |
ISBN: | 149835288X 9781498352888 |
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illustrated | Not Illustrated |
index_date | 2024-07-03T20:13:36Z |
indexdate | 2024-07-10T09:35:46Z |
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record_format | marc |
series2 | IMF Working Papers |
spelling | Karam, Philippe D Verfasser aut The Transmission of Liquidity Shocks The Role of Internal Capital Markets and Bank Funding Strategies Karam, Philippe D Washington, D.C International Monetary Fund 2014 1 Online-Ressource (38 p) txt rdacontent c rdamedia cr rdacarrier IMF Working Papers Working Paper No. 14/207 We analyze the transmission of bank-specific liquidity shocks triggered by a credit rating downgrade through the lending channel. Using bank-level data for US Bank Holding Companies, we find that a credit rating downgrade is associated with an immediate and persistent decline in access to non-core deposits and wholesale funding, especially during the global financial crisis. This translates into a reduction in lending to households and non-financial corporates at home and abroad. The effect on domestic lending, however, is mitigated when banks (i) hold a larger buffer of liquid assets, (ii) diversify away from rating-sensitive sources of funding, and (iii) activate internal liquidity support measures. Foreign lending is significantly reduced during a crisis at home only for subsidiaries with weak funding self-sufficiency Online-Ausg Merrouche, Ouarda Sonstige oth Souissi, Moez Sonstige oth Turk, Rima Sonstige oth http://elibrary.imf.org/view/IMF001/22142-9781498352888/22142-9781498352888/22142-9781498352888.xml Verlag URL des Erstveröffentlichers Volltext |
spellingShingle | Karam, Philippe D The Transmission of Liquidity Shocks The Role of Internal Capital Markets and Bank Funding Strategies |
title | The Transmission of Liquidity Shocks The Role of Internal Capital Markets and Bank Funding Strategies |
title_auth | The Transmission of Liquidity Shocks The Role of Internal Capital Markets and Bank Funding Strategies |
title_exact_search | The Transmission of Liquidity Shocks The Role of Internal Capital Markets and Bank Funding Strategies |
title_exact_search_txtP | The Transmission of Liquidity Shocks The Role of Internal Capital Markets and Bank Funding Strategies |
title_full | The Transmission of Liquidity Shocks The Role of Internal Capital Markets and Bank Funding Strategies Karam, Philippe D |
title_fullStr | The Transmission of Liquidity Shocks The Role of Internal Capital Markets and Bank Funding Strategies Karam, Philippe D |
title_full_unstemmed | The Transmission of Liquidity Shocks The Role of Internal Capital Markets and Bank Funding Strategies Karam, Philippe D |
title_short | The Transmission of Liquidity Shocks |
title_sort | the transmission of liquidity shocks the role of internal capital markets and bank funding strategies |
title_sub | The Role of Internal Capital Markets and Bank Funding Strategies |
url | http://elibrary.imf.org/view/IMF001/22142-9781498352888/22142-9781498352888/22142-9781498352888.xml |
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