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Interactions of capital and liquidity requirements: a review of the literature

Author

Listed:
  • Vo, Quynh-Anh

    (Bank of England)

Abstract
One prominent feature of the regulatory framework put in place after the global financial crisis of 2008 is its reliance on multiple regulatory metrics, which has prompted new research on the interactions between them. This paper reviews the growing literature on the interactions between capital and liquidity requirements – the two primary requirements of the Basel III framework – with the focus on what the literature conveys on the extent to which capital and liquidity requirements are substitutes or complements. The paper also identifies gaps for further research.

Suggested Citation

  • Vo, Quynh-Anh, 2021. "Interactions of capital and liquidity requirements: a review of the literature," Bank of England working papers 916, Bank of England.
    • Handle: RePEc:boe:boeewp:0916
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Capital requirements; liquidity requirements; substitutability; complementarity;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation

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