Arbeitspapier
The dark side of bank wholesale funding
Banks increasingly use short-term wholesale funds to supplement traditional retail deposits. Existing literature mainly points to the "bright side" of wholesale funding: sophisticated financiers can monitor banks, disciplining bad but refinancing good ones. This paper models a "dark side" of wholesale funding. In an environment with a costless but noisy public signal on bank project quality, short-term wholesale financiers have lower incentives to conduct costly monitoring, and instead may withdraw based on negative public signals, triggering inefficient liquidations. Comparative statics suggest that such distortions of incentives are smaller when public signals are less relevant and project liquidation costs are higher, e.g., when banks hold mostly relationship-based small business loans.
- Sprache
-
Englisch
- Erschienen in
-
Series: ECB Working Paper ; No. 1223
- Klassifikation
-
Wirtschaft
Banks; Depository Institutions; Micro Finance Institutions; Mortgages
Financial Institutions and Services: Government Policy and Regulation
Bankruptcy; Liquidation
- Thema
-
Financial crises
liquidity risk
regulation
Wholesale Funding
Bilanzstrukturmanagement
Bankrisiko
Bankenliquidität
Einlagengeschäft
Theorie
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Huang, Rocco
Ratnovski, Lev
- Ereignis
-
Veröffentlichung
- (wer)
-
European Central Bank (ECB)
- (wo)
-
Frankfurt a. M.
- (wann)
-
2010
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:43 MEZ
Datenpartner
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.
Objekttyp
- Arbeitspapier
Beteiligte
- Huang, Rocco
- Ratnovski, Lev
- European Central Bank (ECB)
Entstanden
- 2010
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