IMF paper considers merits of macro-prudential liquidity buffer
Researchers say proposed buffer is ‘analogous’ to leverage ratio
A working paper published by the International Monetary Fund proposes a mechanism for reducing the risk of a banking sector liquidity crisis, and moderate the effects of such a crisis, should it occur.
A simple macro-prudential liquidity buffer, by Daniel Hardy and Philipp Hochreiter, considers whether a macro-prudential liquidity buffer (MPLB) would be desirable and, if so, how it might operate in practice.
"The proposed MPLB is analogous to the leverage ratio; both are based on relatively
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