Hidden Bibliographic Details
| Other authors / contributors: | Minoiu, Camelia, 1977- author.
International Monetary Fund. Research Department.
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| ISBN: | 9781484326749
1484326741
9781484315842
1484315847
9781484387658
1484387651
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| Notes: | Title from PDF title page (IMF Web site, viewed May 14, 2013).
"Research Department"--Page 2 of pdf.
"May 2013"--Page 2 of pdf.
Includes bibliographical references (pages 17-21).
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| Summary: | "We examine the role of bank balance sheet strength in the transmission of financial sector shocks to the real economy. Using data from the syndicated loan market, we exploit variation in banks' reliance on wholesale funding and their structural liquidity positions in 2007Q2 to estimate the impact of exposure to market freezes during 2007-08 on the supply of bank credit. We find that banks with strong balance sheets were better able to maintain lending during the crisis. In particular, banks that were ex-ante more dependent on market funding and had lower structural liquidity reduced the supply of credit more than other banks. However, higher and better-quality capital mitigated this effect. Our results suggest that strong bank balance sheets are key for the recovery of credit following crises, and provide support for regulatory proposals under the Basel III framework"--Abstract.
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