Capital and reserve requirements to control liquidity shocks: an agent based perspective
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comunitat-uji-handle3:10234/111700
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Title
Capital and reserve requirements to control liquidity shocks: an agent based perspectiveAuthor (s)
Tutor/Supervisor
Teglio, AndreaTutor/Supervisor; University.Department
Universitat Jaume I. Departament d'EconomiaDate
2016-07-18Publisher
Universitat Jaume IAbstract
In this paper, we present an agent based model of the banking system, including
banks households and a central bank. The model is able to address some relevant economic
issues regarding liquidity shocks, shocks on ... [+]
In this paper, we present an agent based model of the banking system, including
banks households and a central bank. The model is able to address some relevant economic
issues regarding liquidity shocks, shocks on assets, inequality wealth distributions
and herding effects. By analyzing the effects that different policy configurations have on
the system, we show that capital requirements are more effective than cash reserve restrictions
in order to guarantee the robustness of the banking system. However, in case
of high economic instability, liquidity requirements become ineffective. Also, we find that
when the central bank is acting as a lender of last resource, capital requirement regulation
becomes irrelevant, or even negative for economic growth. We also show that inequality
among households wealth has a negative effect in both stability and growth. Finally,
the model confirms that panic and herding among households accelerates the banking
system breakdown. [-]
Subject
Description
Treball Final de Grau en Economia. Codi: EC1049. Curs: 2015/2016
Type
info:eu-repo/semantics/bachelorThesisRights
info:eu-repo/semantics/openAccess
This item appears in the folowing collection(s)
- Grau en Economia [289]
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