Bank Liquidity Creation and Financial Crisis ― New Perspectives

Bank Liquidity Creation and Financial Crises: New Perspectives is a novel benchmarking tool that delivers a consistent, logical presentation of liquidity creation and integrates regulatory measures to address questions of research and policy interest.

Authors Allen Berger and Christa Bouwman examine ways to measure liquidity creation, how much liquidity banks create in different countries, differences among five financial crises that occurred over the past three decades and during normal times, the effects of monetary policy (including interest rate policy, lender of last resort, and quantitative easing), the effects of capital, the effects of regulatory interventions, and the effects of bailouts.

Readers need no advanced, specialized academic knowledge to understand the concept of liquidity creation. Narrowing the gap between the "academic world" (focused on theories) and the "practitioner world" (dedicated to solving real-world problems), this book is a helpful new tool for evaluating a bank’s performance over time and comparing it to its peer group.

• Focuses on liquidity creation for firms and households, distinguishing it from other contexts
• Directly links bank liquidity to financial crises
• Addresses questions of research and policy interest, especially on liquidity creation outside the United States
• Includes such hot-button topics as the effects of monetary policy (including interest rate policy, lender of last resort, and quantitative easing), the effects of capital, the effects of regulatory interventions, and the effects of bailouts