Crises, Liquidity Shocks, and Fire Sales at Commercial Banks

2014 ◽  
Vol 43 (4) ◽  
pp. 857-884 ◽  
Author(s):  
Nicole Boyson ◽  
Jean Helwege ◽  
Jan Jindra
Keyword(s):  
Commercial Banks ◽  
Liquidity Shocks ◽  
Fire Sales

Crises, Liquidity Shocks, and Fire Sales at Commercial Banks

2012 ◽  
Author(s):  
Nicole M. Boyson ◽  
Jean Helwege ◽  
Jan Jindra
Keyword(s):  
Commercial Banks ◽  
Liquidity Shocks ◽  
Fire Sales

Endogenous Asset Fire Sales and Bank Lending Incentives

2020 ◽  
Vol 10 (04) ◽  
pp. 2150002
Author(s):  
Zhongzhi Song
Keyword(s):  
Cash Holdings ◽  
Bank Lending ◽  
Bank Loans ◽  
Policy Implications ◽  
Liquidity Shocks ◽  
Fire Sales ◽  
The 2008 Financial Crisis ◽  
Lending Decisions ◽  
The Impact ◽  
Capital Injections

This paper examines the impact of banks’ lending incentives on asset prices and bank cash holdings under liquidity risk. Banks make lending decisions based on the tradeoff between costs (fire sales of illiquid assets) and benefits (high returns from bank loans). This paper shows fire sales of assets can be an endogenous outcome, even if banks are endowed with enough cash to meet liquidity shocks. This paper also helps explain why banks have kept a large amount of cash without lending after government capital injections in the 2008 financial crisis. The model further provides policy implications for government intervention.

Crises, Liquidity Shocks, and Fire Sales at Hedge Funds

2012 ◽  
Author(s):  
Nicole M. Boyson ◽  
Jean Helwege ◽  
Jan Jindra
Keyword(s):  
Hedge Funds ◽  
Liquidity Shocks ◽  
Fire Sales

scholarly journals Liquidity Risk Sensitivity of Czech Commercial Banks

2014 ◽  
Vol 62 (2) ◽  
pp. 427-436
Author(s):  
Pavla Vodová
Keyword(s):  
Commercial Banks ◽  
Banking Sector ◽  
Balance Sheet ◽  
Liquidity Risk ◽  
Negative Influence ◽  
Annual Reports ◽  
Risk Sensitivity ◽  
Interbank Market ◽  
Liquidity Shocks ◽  
The Impact

The recent financial crisis has shown that a liquidity risk plays an important role in the current developed financial system. One of the efficient tools of liquidity risk management is stress testing which can show banks their potential vulnerability to liquidity shocks. The aim of this paper is therefore to measure the liquidity risk sensitivity of Czech commercial banks and to find out the most severe scenario and the most vulnerable bank. Our sample included significant part of the Czech banking sector; we used unconsolidated balance sheet data over the period from 2000 to 2011 which were obtained from annual reports of Czech banks. We have evaluated liquidity risk of each bank in the sample via six different liquidity ratios. Then we stressed these baseline values in three stress scenarios: run on a bank (simulated by a 20% withdrawal of deposits), confidence crisis on the interbank market (simulated by a withdrawal of 20% of interbank deposits) and use of committed loans by counterparties (simulated by a 5% increase of loans provided to nonbank clients). We measured the impact of all scenarios by relative change of liquidity ratios. The impact of modelled liquidity shocks differs among scenarios. The most serious liquidity problems would be caused by the first scenario – run on a bank. The negative influence of third scenario (use of committed loans) is less severe. The confidence crisis on the interbank market would not affect bank liquidity at all. The results also show that the severity of the impact of all scenarios worsens in periods of financial distress. We have also found that large and medium sized banks are most vulnerable to liquidity shocks, mainly to massive deposit withdrawals.

Role of Commercial Banks in Financial Literacy

PRODUCTIVITY ◽  
2018 ◽  
Vol 59 (2) ◽  
pp. 186-197
Author(s):  
M. SELVAKUMAR ◽  
◽  
P. ANBUCHEZHIENKAMARAJ ◽  
V. Sathyalakshmi ◽  
R. Mohammed Abubakkar Siddique ◽  
...  
Keyword(s):  
Financial Literacy ◽  
Commercial Banks

Regional banking system in Russia: Trends and factors of spatial distribution

2017 ◽  
pp. 123-141 ◽  
Author(s):  
S. Ageeva ◽  
A. Mishura
Keyword(s):  
Spatial Distribution ◽  
Commercial Banks ◽  
Banking System ◽  
Federal District ◽  
Russian Regions ◽  
Siberian Federal District ◽  
Federal Districts ◽  
Banking Business ◽  
Banking Institutions

We examine the spatial distribution of banks in Russian regions to identify the factors that affect changing territorial architecture of the banking system. The object of the study is dynamics of the number of commercial banks and their branches in 1991-2016. Besides the well-known tendency of concentration of the banking business in Moscow and reducing the number of banks in other regions we analyzed situation in the federal districts taking as an example the Siberian Federal District. This approach allowed us to formulate hypotheses about the causes of differences in the availability of banking institutions in Russian regions.

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