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Contribution Details

Type Bachelor's Thesis
Scope Discipline-based scholarship
Title Liquidity Creation of Swiss Banks
Organization Unit
Authors
  • Monika Silvia Egli
Supervisors
  • Jean-Charles Rochet
Language
  • English
Institution University of Zurich
Faculty Faculty of Economics, Business Administration and Information Technology
Date 2012
Abstract Text Abstract When discussing the financial crisis of 2007 and 2008, the risk of banks is a central point. Yet, banks have other functions which could as well be influenced by a crisis. One main function of a bank is liquidity creation. Liquidity creation states the fact that banks trans­ form liquid liabilities into illiquid assets and create thereby liquidity for the economy. Berger and Bouwman (2009) constructed measures to state the amount of liquidity banks are creating. These measures are used to analyze the two large Swiss banks, UBS and CS, and to link the results to the capital hold by banks as well as to the finan­ cial crisis of 2007 and 2008. The outcome shows that the Swiss banks create liquidity, however, the amount varies strongly over time. The influence of the financial crises and the new regulations, resulting as a reaction of the financial crisis, can partially explain the variation but not entirely.
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