| Item Type |
Journal paper
|
| Abstract |
We compare liquidity patterns of 10,979 failed and non-failed US banks from 2001 to mid-2010 and detect diverging capital structures: failing banks distinctively change their liquidity position about three to five years prior to default by increasing liquid assets and decreasing liquid liabilities. The build-up of liquid assets is primarily driven by short term loans, whereas long term loan positions are significantly reduced. By abandoning (positive) term transformation throughout the intermediate period prior to a default, failing banks drift away from the traditional banking business model. We show that this liquidity shift is induced by window dressing activities towards bondholders and money market investors as well as a bad client base. |
| Authors |
Morkötter, Stefan; Schaller, Matthias & Westerfeld, Simone |
| Journal or Publication Title |
European Financial Management |
| Language |
English |
| Keywords |
liquidity, bank default, capital structure, income structure |
| Subjects |
business studies |
| HSG Classification |
contribution to scientific community |
| Refereed |
Yes |
| Date |
March 2014 |
| Publisher |
Wiley-Blackwell |
| Place of Publication |
Oxford |
| Volume |
20 |
| Number |
2 |
| Page Range |
291-320 |
| Number of Pages |
30 |
| ISSN |
1354-7798 |
| ISSN-Digital |
1468-036X |
| Publisher DOI |
https://doi.org/10.1111/j.1468-036X.2011.00637.x |
| Depositing User |
Prof. Dr. Simone Westerfeld
|
| Date Deposited |
05 Sep 2011 15:41 |
| Last Modified |
16 Dec 2022 01:21 |
| URI: |
https://www.alexandria.unisg.ch/publications/205310 |
The Liquidity Dynamics of Bank Defaults
