Bank Liquidity Creation and Financial Crises

"A key economic function of banks is to create liquidity in the economy, financing illiquid assets with liquid labilities and enhancing overall funding of investment projects in the economy. Knowing how to measure how much liquidity is being created at any point in time is of central importance for economists, policymakers and bankers. This book, based on the path-breaking empirical measure for bank liquidity creation developed by the authors in their earlier published research, provides an exhaustive and enlightening discussion of the variety of interesting issues related to bank liquidity creation, including its implications for bank stability and regulation. A must read!" --Anjan Thakor, Washington University in St. Louis

"This text provides an excellent insight into the features of banks and the dynamics of financial intermediation. The authors provide terrific coverage of the liquidity creation process and how financial crises inhibit such activity. This is an essential guide for all students of banking and financial system behavior." --Philip Molyneux, Bangor University