liquidity

Hello, On the topic Study Notes: McGuire, US Dollar Shortage in Global Banking we are introduced to the Central Bank Liquidity Swaps and how the FED helped ECB to alleviate the shortage of USD on and after the GFC. There it says that the central banks can create any amount of money they need...

Learning objectives: Calculate a bank’s net liquidity position and explain factors that affect the supply and demand of liquidity at a bank. Compare strategies that a bank can use to meet demands for additional liquidity. Estimate a bank’s liquidity needs through three methods (sources and uses...

Learning objectives: Examine how the clearing of over-the-counter transactions through central counterparties has affected risks in the financial system. Assess whether central clearing has enhanced financial stability and reduced systemic risk. Describe the transformation of counterparty risk...

I can't seem to reply to the original thread. Don't quite get the solution posted for 303.3 Let A = Assets and E = Equity with D = A - E. ROE = ROA/Equity = [(5%*A) - (A - E)*4%]/E. Since ROE must be at least 15%, the minimum leverage is achieved when ROE = 15% such that: [(5%*A) - (A -...

Questions: 303.1. Your colleague Peter blames the fragility of commercial banks primarily on the fractional-reserve banking system. He argues that fractional-reserve banking exposes a bank to the threat of a general loss of confidence in its ability to pay out depositors. In an extreme...