Selling The Farm By Barry Estabrook
Posted By Admin @ Mar 02, 2022
The research study conducted by the Bonner, Lelyveld, and Zymek in 2014 presented a conceptual background for the market inequalities and funding liquidities. Moreover, researchers also elaborated on liquidity risk, liquidity regulation, and liquidity regulation across countries to present a conceptual background. Furthermore, these variables of interest are presented as contextual determinants as concentration, disclosure, and deposit insurance. In the research article, some important variables linked with the macroeconomics and specification of bank operations are presented as contextual factors. Researchers presented secondary research findings extracted from the literature review of books and research articles to explain trade-off issues, liquidity risks for banks, and liquid assets. However, research is not only focused on secondary research findings. In this research work, primary data is also collected from the markets. The research study is based on the data findings of OECD countries. The researcher collected information about banks from reports and bank scope database from 1998 to 2007 records. Researchers were determined to study actual reasons and contextual factors causing risk and liquidating issues for banks therefore, wider time spam is selected. Critically evaluating this research methodology we can say that panel data and time series selection was appropriate for this research study as it was capable to provide desired quantitative data to the researchers for evaluation. During this time banks hand many ups and downs. By evaluating and analyzing data based on this time series can provide more details about the possible factors influencing risk factors and liquidity issues. The research samples or selected data sets for OECD countries had an average liquidity buffer around 6.4% and the median of total assets 4.5%. Moreover, in my views, the selection of panel data and time series is also appropriate because it also covers the time of the global financial crisis started in 2007 and the Basel agreement of 1998. (Bonner, Lelyveld, & Zymek, 2014; Banks, 2013)
The research article is written on the topic of banks' liquidity buffers and liquidity regulation roles to address these buffers. In the research study, the researcher raised questions about the presence of various strategies for liquidity in the banks and the identification of risk factors. Moreover, the article also addressed the difference between a systematic risk factor and institutional liquidity risk to explain how both relate and contribute to the reduction in economy-wide liquidity. To address research questions and issues quantitative data set is obtained from OECD countries during a specified period of time which includes the global financial crisis and Basel Agreement. Statistical significance testing and regression results conclude that liquidity regulations enforce banking institutes to hold more liquid and increase the marginal cost of funds. During the period of stress, higher liquidity buffers were directly linked with liquidity regulations. According to the research findings, banks are responsible to shape liquidity risk management (Arif & Anees, 2012). Liquidity risks for a bank can be determined by country-specific factors and bank-specific factors. However, researchers claim that liquidity regulations coincide with the buffers of a bank having higher liquidity but at the same time relatively lower lending volumes (Bonner, Lelyveld, & Zymek, 2014). Conclusively, researchers stated that higher interest rates and higher lending volumes are linked with liquidity regulation. The analysis presented that strong incentives are required to harmonize disclosure and meet the complementary disclosure features. In my view, research findings and results are supportive of the liquidity requirement implementation in the banking sector while considering the unintended consequences of stress. These unintended but highly influential consequences can be identified as presumably and flexibility which has the capability to reduce stress for the liquidity risk in the banks.