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Board of Governors of the Federal Reserve System (U.S.)
International Finance Discussion Papers
Liquidity Funding Shocks : The Role of Banks' Funding Mix
This study attempts to evaluate the impact of an increase in banks' funding stress and its transmission to the real economy, taking into account different funding sources banks can rely on. Using aggregate data from eight Euro area financial systems, we find that following a liquidity funding shock, both credit and GDP decline in different amounts and lengths. GDP reverts faster than credit. Furthermore, periphery countries experience a more pronounced fall in deposits and credit growth and the negative effects from the shock last longer than in core countries. Banks' funding seems to play a relevant role as periphery countries rely more on wholesale funding during normal times.
Cite this item
Antonio Alvarez & Alejandro Fernandez & Joaquin Garcia-Cabo & Diana Posada, Liquidity Funding Shocks : The Role of Banks' Funding Mix, Board of Governors of the Federal Reserve System (U.S.), International Finance Discussion Papers 1245, 22 Apr 2019.
- E50 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - General
- E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
- F45 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Macroeconomic Issues of Monetary Unions
Keywords: Liquidity funding shocks ; ECB policy ; Euro Area
This item with handle RePEc:fip:fedgif:1245
is also listed on EconPapers
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