The Analysis of Potential Benefits and Negative Consequences of the LCR's and NSFR's Implementation in European Banks Cover Image

Analiza potencjalnych korzyści oraz negatywnych konsekwencji wdrożenia norm LCR oraz NSFR w bankach europejskich
The Analysis of Potential Benefits and Negative Consequences of the LCR's and NSFR's Implementation in European Banks

Author(s): Paweł Niedziółka
Subject(s): Financial Markets
Published by: Szkoła Główna Handlowa w Warszawie
Keywords: liquidity risk; Basel III; LCR; NSFR; impact of the liquidity regulations on the banks

Summary/Abstract: The introduction of liquidity ratios on the banking sector and the real economy will lead to adaptation of the banks. Mismatch between the maturity of assets and liabilities will be subject to reduction. These shifts in the banks' balance sheets may result in diminishing profitability of banks as long as the cost of maintaining additional capital and balance sheet structure changes will not be passed on to customers. Another consequence may be an impediment to access of non-financial entities to long-term financing. Thus, increased cost of credit and reduction of its availability in the short term will have negative impact on economic growth while introduction of liquidity standards and new capital requirements significantly reduces the probability of a banking crisis, which compensates for interim and slight decrease in the growth rate.

  • Issue Year: 23/2015
  • Issue No: 3.1
  • Page Range: 207-226
  • Page Count: 20
  • Language: Polish