Skip to main content

Banks Digging Through Couches For Change To Keep Lights On More Likely To Blow Up

  • Author:
  • Updated:

Bad liquidity.

It’s true! A study says so.

Banks that depend heavily on short-term sources of cash to fund longer-term operations and investments open themselves up to the risk of runs, and potentially a full-blown crisis, according to research from the Federal Reserve Bank of Dallas that identifies such “liquidity mismatches” as an early sign of impending trouble….

The model indicates a five percentage point increase in liquidity mismatches raises the chances of “failure or distress” in the following 12 months by about a quarter of a percentage point.

Bank Reliance on Short-Term Funds a Harbinger of Crisis [WSJ Real Time Economics blog]


Chaining them up in the tower on Maiden Lane was a non-starter. By Beyond My Ken (Own work) [GFDL or CC BY-SA 4.0-3.0-2.5-2.0-1.0], via Wikimedia Commons

Banking Culture Isn’t Going To Change So Why Bother Trying?

How do you regulate banks these days? How do you hold a moonbeam in your hand?

Kashkari photo: Washington Post/Getty

If He Had To Do It Over Again, Neel Kashkari Would Blow It All Up

The bailer-outer in chief has become a Bernie-fide bomb-thrower.

Digging Up The Skeletons In Credit Suisse's Closet Proves A Surprisingly Engaging Hobby

Sure, it's work, but at least part of Neil Barofsky is loving this.