Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/234196 
Year of Publication: 
2021
Series/Report no.: 
Deutsche Bundesbank Discussion Paper No. 16/2021
Publisher: 
Deutsche Bundesbank, Frankfurt a. M.
Abstract: 
We investigate whether idiosyncratic interbank funding shocks affecting a bank headquarters can trigger a liquidity hoarding reaction by their regional branches. Shock-affected branches of Brazilian banks increase liquid assets and cut lending in the shocks' aftermath compared to non-affected branches within the same municipality, even in absence of a market-wide freeze. These effects increase in branches' reliance on internal funding and vary depending on banks' access to central bank emergency liquidity. Our findings suggest that the geographical fragmentation of branches' funding limits their ability to offset idiosyncratic funding shocks.
Subjects: 
Interbank funding
Internal capital markets
Financial market structure
Liquidity risk
Central bank interventions
JEL: 
G01
G11
G21
ISBN: 
978-3-95729-824-9
Document Type: 
Working Paper

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