Determinants of banks’ liquidity: A French perspective on interactions between market and regulatory requirements

Assessing the Impact of Basel III: Evidence from Structural Macroeconomic Models

“…The paper demonstrates the positive role that liquidity policy can have on reducing the need for lender of last resort interventions during financial crises. The authors examine the opportunity costs of liquidity policy, providing evidence for the presence of private costs to banks of requirements that force them to hold more liquid assets than their own preferences, with a negative impact on profitability (see also de Bandt et al, 2021). One major finding is that the opportunity cost of liquidity regulation is small, and smaller than that of capital regulation.…”

“…Liquidity regulation reduces the probability of a run and can be demonstrated to reduce the profits of banks to a lesser extent than for other approaches (Miller and Sowerbutts, 2018). Similar approaches have been used to examine the complementarity between capital and liquidity regulation (Hoerova et al, 2018;de Bandt et al, 2021). Another extension of the Diamond and Dybvig framework is to include endogenous funding, with banks and borrowers subject to limited liability.…”

Bank credit risk and macro-prudential policies: Role of counter-cyclical capital buffer

“…hoard liquidity. By contrast, de Bandt et al (2021) use evidence from French banks, and suggest that banks' liquidity coefficients decrease in times of crisis. This could be due to the outflow of liquid assets from banks.…”

Effect of Liquidity on Profitability of Banks using Revisited Panel Data Analysis: Does Ownership Structure Matter?

“…To cope with the competitive banking world, banks try to enhance their performance to survive efficiently. Banking industry is also regarded as a most influential sector for the economic development of a country (De Bandt, Lecarpentier, & Pouvelle, 2021). In 1972, the newly formed Bangladesh government announced that the branch of the National Bank of Pakistan was the central bank for this country and changed its name to Bangladesh bank by the presidential order no 127 (Islam, Sarker, Rahman, Sultana, & Prodhan, 2017).…”