Liquidity and transparency in bank risk management /

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Bibliographic Details
Author / Creator:	Ratnovski, Lev.
Imprint:	[Washington, D.C.] : International Monetary Fund, ©2013.
Description:	1 online resource (41 pages)
Language:	English
Series:	IMF working paper ; WP/13/16 IMF working paper ; WP/13/16.
Subject:	Bank liquidity -- Econometric models. Risk management -- Econometric models. Risk management -- Econometric models.
Format:	E-Resource Book
URL for this record:	http://pi.lib.uchicago.edu/1001/cat/bib/12501494

Hidden Bibliographic Details
Other authors / contributors:	International Monetary Fund. Research Department.
ISBN:	9781475545883 1475545886 9781475536157 1475536151 9781616356774 1616356774
Notes:	Title from PDF title page (IMF Web site, viewed Jan. 30, 2013). "Research Department. "January 2013." Includes bibliographical references.
Summary:	Banks may be unable to refinance short-term liabilities in case of solvency concerns. To manage this risk, banks can accumulate a buffer of liquid assets, or strengthen transparency to communicate solvency. While a liquidity buffer provides complete insurance against small shocks, transparency covers also large shocks but imperfectly. Due to leverage, an unregulated bank may choose insufficient liquidity buffers and transparency. The regulatory response is constrained: while liquidity buffers can be imposed, transparency is not verifiable. Moreover, liquidity requirements can compromise banks' transparency choices, and increase refinancing risk. To be effective, liquidity requirements should be complemented by measures that increase bank incentives to adopt transparency.

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