Is there a role for funding in explaining recent US bank failures?

Pierluigi Bologna

No 103, Questioni di Economia e Finanza (Occasional Papers) from Bank of Italy, Economic Research and International Relations Area

Abstract: This paper tests the role of different banks� liquidity funding structures in explaining the bank failures that occurred in the United States between 2007 and 2009. The results highlight that funding is indeed a significant factor in explaining banks� probability of default. By confirming the role of funding as a driver of banking crisis, the paper also recognizes that the new liquidity framework proposed by the Basel Committee on Banking Supervision appears to have the features needed to strengthen banks� liquidity conditions and improve financial stability. Its correct implementation, together with closer supervision of banks� liquidity and funding conditions, appear decisive, however, if such improvements are to be achieved.

Keywords: banks; default; crises; liquidity; funding; brokered deposits; liquidity regulation; deposit insurance; United States (search for similar items in EconPapers)
JEL-codes: G01 G20 G21 G28 (search for similar items in EconPapers)
Date: 2011-10
New Economics Papers: this item is included in nep-ban, nep-cba, nep-ias and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (17)

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https://www.bancaditalia.it/pubblicazioni/qef/2011-0103/QEF_103.pdf (application/pdf)

Related works:
Working Paper: Is there a Role for Funding in Explaining Recent U.S. Banks' Failures? (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:bdi:opques:qef_103_11

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