{"title":"Bank Capital and Liquidity Creation in Asia Pacific","authors":"Maggie X. Fu, Yongjia Lin, P. Molyneux","doi":"10.1111/ecin.12308","DOIUrl":null,"url":null,"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.","PeriodicalId":340522,"journal":{"name":"Wiley-Blackwell: Economic Inquiry","volume":"20 1","pages":"0"},"PeriodicalIF":0.0000,"publicationDate":"2016-04-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"65","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Wiley-Blackwell: Economic Inquiry","FirstCategoryId":"1085","ListUrlMain":"https://doi.org/10.1111/ecin.12308","RegionNum":0,"RegionCategory":null,"ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"","JCRName":"","Score":null,"Total":0}
引用次数: 65
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.
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