Likewise, few can seriously object to its demand that banks hold enough liquid assets to withstand a severe, month-long liquidity shock.The tricky bits will be setting the absolute level of capital that is needed in the system and defining a tolerable amount of short-term funding.
Next up is Christopher Bowdler, a fellow in economics at Oriel College, University of Oxford.surveysDespite a range of constraints on its ability to launch unconventional monetary policy measures, the ECB has played a key part in managing the Eurozone crisis, particularly through large scale and long maturity liquidity injections through its Long-Term Refinancing Operations. Long-Term Refinancing Operations
Although the presence of long term liquidity constraints and of positive externalities associated to academic education may suggest that the degree of investment in this type of education is lower than the social optimum, we do not recommend that vocational education should be drastically reduced or even eliminated from upper secondary curricula.
This will enable banks to continue to have access to long-term liquidity on demand.
The long-term liquidity rules, aimed at dealing with a prolonged downturn, may never see the light of day.
The lower borrowing costs appeared to reflect the adoption of a new austerity package in Italy, as well as a huge infusion of low-cost, long-term liquidity into euro zone banks by the European Central Bank last week.
But after the collapse of Lehman Brothers, "the banks were focused on their long-term liquidity," rather than on offsetting profits, said another income-restricted housing expert, Michael Novogradac, the managing partner in the San Francisco office of Novogradac & Company.
As Willem Buiter of Citigroup points out, the ECB's version could be hardened if the bank were to do another long-term liquidity operation at a fixed rate (either 0.25%, or 0.1% if it cut again).
"This really helps the financial profile for Comcast by creating near- and long-term liquidity for this otherwise illiquid investment," Brian L. Roberts, Comcast's president, said in an interview yesterday.
The healthier sort of bank, with an excess of deposits over loans, is now less likely to lend its spare cash to other banks for fear that they have already pledged their best collateral to the ECB in exchange for long-term liquidity.
