A Crisis of Banks as Liquidity Providers

Abstract

Can banks maintain their advantage as liquidity providers when exposed to a financial crisis? While banks honored credit lines drawn by firms during the 2007 to 2009 crisis, this liquidity provision was only possible because of explicit, large support from the government and government-sponsored agencies. At the onset of the crisis, aggregate deposit inflows into banks weakened and their loan-to-deposit shortfalls widened. These patterns were pronounced at banks with greater undrawn commitments. Such banks sought to attract deposits by offering higher rates, but the resulting private funding was insufficient to cover shortfalls and they reduced new credit.JEL Codes: E4, G01, G11, G21, G28.

Inconvenient Retail Depositors of the Euro Area Credit Institutions — Who Are they?

“…This means that the chance of a large deposit possession appeared greater there in comparison with the other member states, assuming the constancy of other independent variables. The same could be concluded for the variables WRA HIGH and WFA HIGH 12 . The propensity or ability to have a high value deposit increased when a household was supplied with real and financial assets with the values from the highest range.…”

“…Some of them analyse the deposits against the background of the financial crisis. The worldwide literature discusses, among others, the linkages between national deposit guarantee schemes and investors' perception of risk [12]- [13]. Some studies verify relationships between deposit withdrawals and the occurrence of crisis [14], changes in market interest rates [15]- [16], stresses on commercial paper markets [17]- [18], or loan availability [17], [19].…”

Innovational approaches to attracting people savings in the modern economy

“…Таким образом, при формировании ресурсной базы путем привлечения сбережений населения банки сталкиваются с рядом проблем [31]. Прежде всего, вызовами для банков являются негативная экономическая среда и неблагоприятная конъюнктура финансового рынка, существенно отражающаяся на сберегательной активности населения, предопределяющая предпочтения вкладчиков, влияющая на структуру банковского портфеля депозитов физических лиц и концентрацию рынка вкладов.…”

10.17265/1537-1514/2016.12.004

“…Some of them analyze the deposits against the background of the financial crisis. The literature discusses, among others, the linkages between national deposit guarantee schemes, and investors' perception of risk (Acharya & Mora, 2015;Brown, Guin, & Morkoetter, 2013;Karas, Pyle, & Schoors, 2013). Some studies verify the relationships between deposit withdrawals and the occurrence of crisis (Cussen, O'Leary, & Smith, 2012), changes in market interest rates (Acharya & Mora, 2012;Bouyon, 2014), capital market distress (Gatev, Schuermann, & Strahan, 2009;Pennacchi, 2006) or loan availability (Acharya, Almeida, & Campello, 2013).…”