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Fragmenting Markets : Post-Crisis Bank Regulations and Financial Market Liquidity / Darrell Duffie.

By: Material type: TextTextPublisher: Berlin ; Boston : De Gruyter, [2022]Copyright date: ©2022Description: 1 online resource (X, 84 p.)Content type:
Media type:
Carrier type:
ISBN:
  • 9783110673029
  • 9783110673128
  • 9783110673050
Subject(s): DDC classification:
  • 332/.0415 23/eng/20230123
LOC classification:
  • HG4523 .D84 2023
Other classification:
  • online - DeGruyter
Online resources: Available additional physical forms:
  • Issued also in print.
Contents:
Frontmatter -- Preface -- Contents -- 1 The Cost of Bank Balance Sheet Space -- 2 Leverage Rule Distortions -- 3 Funding Cost Frictions -- 4 Market Design Implications -- 5 When the Fed Rescued the Treasury Market -- Bibliography
Summary: Post-crisis capital regulations and new failure-resolution rules increased the funding costs that are borne by bank shareholders, and thus the cost to buy-side firms for access to space on the balance sheets of large banks. A policy implication is the encouragement of market infrastructure and trading methods that reduce the amount of space on bank balance sheets that is needed to conduct a given amount of trade. Using models and evidence, this book addresses the implications for financial-market liquidity of these regulations for systemically important banks and argues that current rules do not allow for potential levels of market efficiency and financial stability. In this insightful analysis of the impact of regulation on financial market efficiency post-2008, the author argues that bank capital levels could actually be pushed higher while still improving the liquidity of markets for safe assets such as low-risk fixed-income instruments by relaxing the leverage-ratio rule and increasing risk-based capital requirements.

Frontmatter -- Preface -- Contents -- 1 The Cost of Bank Balance Sheet Space -- 2 Leverage Rule Distortions -- 3 Funding Cost Frictions -- 4 Market Design Implications -- 5 When the Fed Rescued the Treasury Market -- Bibliography

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http://purl.org/coar/access_right/c_16ec

Post-crisis capital regulations and new failure-resolution rules increased the funding costs that are borne by bank shareholders, and thus the cost to buy-side firms for access to space on the balance sheets of large banks. A policy implication is the encouragement of market infrastructure and trading methods that reduce the amount of space on bank balance sheets that is needed to conduct a given amount of trade. Using models and evidence, this book addresses the implications for financial-market liquidity of these regulations for systemically important banks and argues that current rules do not allow for potential levels of market efficiency and financial stability. In this insightful analysis of the impact of regulation on financial market efficiency post-2008, the author argues that bank capital levels could actually be pushed higher while still improving the liquidity of markets for safe assets such as low-risk fixed-income instruments by relaxing the leverage-ratio rule and increasing risk-based capital requirements.

Issued also in print.

Mode of access: Internet via World Wide Web.

In English.

Description based on online resource; title from PDF title page (publisher's Web site, viewed 29. Mai 2023)