Liquidity Regulation: Rationales, Benefits and Costs

Gianni De Nicolò

National Institute Economic Review, 2016, vol. 235, issue 1, R18-R26

Abstract: This paper reviews the market failures that may justify the need for liquidity regulation, assesses whether liquidity regulation is a necessary complement to Lender of Last Resort (LOLR) policies, capital regulation and prompt corrective action, surveys the available evidence on the net benefits of liquidity regulation, and concludes by outlining research directions useful to improve bank regulation design.

Keywords: liquidity crises; bank regulation; liquidity requirements (search for similar items in EconPapers)
JEL-codes: G21 G28 (search for similar items in EconPapers)
Date: 2016
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Persistent link: https://EconPapers.repec.org/RePEc:sae:niesru:v:235:y:2016:i:1:p:r18-r26

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