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Bank Capital and Liquidity Creation in Asia Pacific

Fu, X. and Lin, Y. and Molyneux, P. (2015) Bank Capital and Liquidity Creation in Asia Pacific. Economic Inquiry, 54 (2). pp. 966-993. DOI: 10.1111/ecin.12308

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Abstract

We calculate liquidity creation for a large sample of commercial banks in 14 Asia-Pacific economies from 2005 to 2012. We find that banks in this region created $7.83 trillion in liquidity in 2012, or approximately 3.24 times the total liquidity created in 2005. Large banks and those based in Developing Asia created the highest liquidity. We also investigate the bicausal relationship between liquidity creation and regulatory capital and find that the trade-off between the benefits of financial stability induced by enhanced capital requirements and those of higher liquidity creation is applicable to all of the sample banks, regardless of bank size and economic region

Item Type: Article
Subjects: Research Publications
Departments: College of Business, Law, Education and Social Sciences > Bangor Business School
Date Deposited: 25 Sep 2015 02:33
Last Modified: 19 Apr 2016 02:40
ISSN: 0095-2583
URI: http://e.bangor.ac.uk/id/eprint/5415
Identification Number: DOI: 10.1111/ecin.12308
Publisher: John Wiley & Sons
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