Information, Liquidity and Risk in the International Interbank Market: Implicit Guarantees and Private Credit Market Failure

Bernard, Henri; Bisignano, Joseph

doi:10.2139/ssrn.849014

Cited by 15 publications

(6 citation statements)

References 48 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…The Sub-Prime crisis has shown that interbank market liquidity can be highly vulnerable as well as that of securitised debt markets. Periodic collapse has been a feature of international interbank markets (Bernard and Bisignano, 2000) but had hitherto been less common in domestic interbank markets.…”

Section: Economic Consequencesmentioning

confidence: 99%

Macroprudential Regulation — The Missing Policy Pillar

Davis

Karim

2010

Natl. Inst. econ. rev.

View full text Add to dashboard Cite

The recent Sub-Prime crisis has prompted a close focus on the causes of financial instability as well as the issue of whether it can be prevented. There is a growing realisation that the Sub-Prime crisis, although having some important unique features, also had a number of generic aspects in common with earlier financial crises, of which a large number have been seen in recent decades. Accordingly, the crisis has prompted a debate about macroprudential policy, which focuses on the financial system as a whole, treating aggregate risk as endogenous with regard to collective behaviour of institutions. Our survey shows that a great deal of progress has been made in ‘macroprudential surveillance’ and related research on causes and predictors of crises. Much less progress has been made in ‘macroprudential regulation’, the design and implementation of policies to prevent or mitigate threatened crises.

show abstract

Section: Economic Consequencesmentioning

confidence: 99%

Macroprudential Regulation — The Missing Policy Pillar

Davis

Karim

2010

Natl. Inst. econ. rev.

View full text Add to dashboard Cite

show abstract

“…This particularly reflected low confidence in banks that were dependent on wholesale funding, because markets for such funds, that had previously been costly and restrictive, proved to be totally closed to such institutions after Lehman's failure. Cross-border lending was even more sharply curtailed than domestic, showing again the historic instability of the international interbank market (Bernard and Bisignano, 2000). Money market funds in particular underwent losses when Lehman's collapsed, and this led to them 'breaking the dollar' and needing support from the Federal Reserve.…”

Section: Events Of the Crisismentioning

confidence: 99%

The Evolution of the Financial Crisis of 2007—8

Barrell

Davis

2008

Natl. Inst. econ. rev.

View full text Add to dashboard Cite

Abstract:The financial crisis that started in August 2008 reached a climax in the autumn of 2008 with a wave of bank nationalisations across North America and Europe. Although banking crises are not uncommon, this is the largest since 1929-33. This paper discusses the build-up to the crisis, looking at the role of low real interest rates in stimulating an asset price bubble. That bubble was stocked by financial innovation and increases in lending. New financial products were not stress tested and have failed in the downturn. After discussing the bubbles we look at the collapse of the complex asset structure, and then put the crisis in the context of the literature. The paper concludes with a discussion of policy implications of the crisis, and advocates a significant improvement in the regulatory structure.

show abstract

“…Many scholars have considered a number of issues, along with several influential factors as the concerns in the IMM (Acharya et al., 2012; Angelini et al., 2011; Bernard & Bisignano, 2000; Dičpinigaitienė & Novickytė, 2018; Furfine, 2003; Martínez‐Jaramillo et al., 2010). Although several researchers have already surveyed various aspects of this market (Arman, 2013; Caccioli et al., 2017; Dičpinigaitienė & Novickytė, 2018; Hasman, 2013; Pozlep, 2018), to the best of our knowledge, there is still a lack of a comprehensive study that identifies the roots of major concerns and integrate them into the body of knowledge of this field.…”

Section: Introductionmentioning

confidence: 99%

Interbank money market concerns and actors’ strategies—A systematic review of 21st century literature

Alaeddini

Madiès

Reaidy

et al. 2022

Journal of Economic Surveys

View full text Add to dashboard Cite

As the reallocator of liquidity from banks with excess to banks with a deficit, the interbank money market (IMM) plays a fundamental role in the proper functioning of the banking system and the economy as a whole. The aggregate uncertainty derived from stochasticity of the overall level of the demand for short-term liquidity and the likelihood of domino failures of tightly connected competitors who lend themselves vast amounts of liquidity explains the complexity of decisions in this environment. To identify the most significant factors influencing actors' strategies, we first present the five underlying patterns discovered through a bibliometric analysis of 609 scientific documents in this field: contagion and systemic risk, stability, market structure, relationship and trust, and default and failure. Then, our detailed study findings on 160 recent works indicate elements that affect central banks' strategies in reducing systemic risk and preventing financial contagion, as well as managing the interbank network in a way that makes it more stable and resilient to shocks to conserve market confidence. Furthermore, they address factors that influence banks' strategies to maintain their lending relationships and mitigate default risk. In addition toThis is an open access article under the terms of the Creative Commons Attribution License, which permits use, distribution and reproduction in any medium, provided the original work is properly cited.

show abstract

Information, Liquidity and Risk in the International Interbank Market: Implicit Guarantees and Private Credit Market Failure

Cited by 15 publications

References 48 publications

Macroprudential Regulation — The Missing Policy Pillar

Macroprudential Regulation — The Missing Policy Pillar

The Evolution of the Financial Crisis of 2007—8

Interbank money market concerns and actors’ strategies—A systematic review of 21st century literature

Contact Info

Product

Resources

About