Main Content

Bank Liquidity

  • Too Much of a Good Thing: The Implications of Higher Bank Capital Requirements

    Alexey Levkov, and Clark Peterson

    Capital requirements are important to ensure that externalities associated with a bank’s failure are borne by the bank alone. However, there are both private and social costs associated with requiring banks to hold more capital. Empirical and theoretical evidence indicate that there are significant trade-offs in requiring higher levels of bank equity capital. Policymakers should seek to identify the costs and benefits of requiring more capital at banks and calibrate rulemakings accordingly.
  • My Perspective

    Rob Ceske

    As banks and other market participants were under-prepared for the liquidity challenges of the crisis, heightened focus on liquidity is justified. However, regulators should be wary of how new liquidity regulations interact with capital rules, impact greater risk management practices, and drive liquidity risk to the shadows.
  • Margin for Error: Balancing the Risks and Benefits of Uncleared Swaps

    Donna Parisi, and Barnabas W B Reynolds

    Margin requirements for uncleared derivatives are intended to reduce counterparty credit risk, limit contagion, and incentivize the central clearing of derivatives trades. However, they risk fueling potentially negative outcomes such as straining market liquidity and subsequently driving activity to the shadows. In addition, the ambiguous scope of their extraterritorial application threatens to introduce new forms of uncertainty and legal risk into cross-border transactions.
  • For the Record

    TCH Association President Paul Saltzman calls for a reconceptualization of banking resilience and discusses key considerations for macroprudential policy with this in mind.
  • TCH Regional Bank Roundtable

    TCH Staff

    Executives from Capital One, Comerica, Fifth Third, KeyBank, and U.S. Bank weigh in on the most important issues impacting regional banks, including their growth strategy, competitive challenges, the regulatory environment, the U.S. economic outlook, and how the regulatory framework can be better calibrated to address the risks posed by regional banks.