1 option
When the Rivers Run Dry : Liquidity and the Use of Wholesale Funds in the Transmission of the U.S. Subprime Crisis / Raddatz, Claudio
World Bank Open Knowledge Repository (formerly "World Bank E-Library Publications") Available online
View online- Format:
- Book
- Government document
- Author/Creator:
- Raddatz, Claudio
- Series:
- Policy research working papers.
- World Bank e-Library.
- Language:
- English
- Subjects (All):
- Access to Finance.
- Bank.
- Bank run.
- Banking system.
- Bankruptcy.
- Banks.
- Banks & Banking Reform.
- Debt.
- Debt Markets.
- Demand deposits.
- Deposits.
- Emerging Markets.
- Finance.
- Finance and Financial Sector Development.
- Financial crises.
- Financial institutions.
- Financial Intermediation.
- Governments.
- Guarantees.
- Housing.
- Insurance.
- Investment banking.
- Investment banks.
- Loans.
- Macroeconomics.
- Markets.
- Private Sector Development.
- Local Subjects:
- Access to Finance.
- Bank.
- Bank run.
- Banking system.
- Bankruptcy.
- Banks.
- Banks & Banking Reform.
- Debt.
- Debt Markets.
- Demand deposits.
- Deposits.
- Emerging Markets.
- Finance.
- Finance and Financial Sector Development.
- Financial crises.
- Financial institutions.
- Financial Intermediation.
- Governments.
- Guarantees.
- Housing.
- Insurance.
- Investment banking.
- Investment banks.
- Loans.
- Macroeconomics.
- Markets.
- Private Sector Development.
- Physical Description:
- 1 online resource (56 pages)
- Other Title:
- When The Rivers Run Dry
- Place of Publication:
- Washington, D.C., The World Bank, 2010
- System Details:
- data file
- Summary:
- This paper provides systematic evidence of the role of banks' reliance on wholesale funding in the international transmission of the ongoing financial crisis. It conducts an event study to estimate the impact of the liquidity crunch of September 15, 2008, on the stock price returns of 662 individual banks across 44 countries, and tests whether differences in the abnormal returns observed around those events relate to these banks' ex-ante reliance on wholesale funding. Globally and within countries, banks that relied more heavily in non-deposit sources of funds experienced a significantly larger decline in stock returns even after controlling for other mechanisms. Within a country, the abnormal returns of banks with high wholesale dependence fell about 2 percent more than those of banks with low dependence during the three days following Lehman Brothers' bankruptcy. This large differential return suggests that liquidity played an important role in the transmission of the crisis.
The Penn Libraries is committed to describing library materials using current, accurate, and responsible language. If you discover outdated or inaccurate language, please fill out this feedback form to report it and suggest alternative language.