Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/183351
Authors: 
Hoerova, Marie
Mendicino, Caterina
Nikolov, Kalin
Schepens, Glenn
Van den Heuvel, Skander
Year of Publication: 
2018
Series/Report no.: 
ECB Working Paper 2169
Abstract: 
This paper investigates the costs and benefits of liquidity regulation. We find that liquidity tools are beneficial but cannot completely remove the need for Lender of Last Resort (LOLR) interventions by the central bank. Full compliance with current Liquidity Coverage Ratio (LCR) and Net Stable Funding Ratio (NSFR) rules would have reduced banks' reliance on publicly provided liquidity during the global financial crisis without removing such assistance altogether. The paper also investigates the output costs of introducing the LCR and NSFR using two macro-financial models. We find these costs to be modest.
Subjects: 
Banking
Liquidity regulation
Capital requirements
Central bank
Lender-of-last-resort
JEL: 
E44
E58
G21
G28
Persistent Identifier of the first edition: 
ISBN: 
978-92-899-3274-5
Document Type: 
Working Paper
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