The Availability of Household Deposits in the Euro Area vs. Regulatory Approach to Funding Stability of Credit Institutions

• Other Authors: Hội thảo quốc tế Ngân hàng và Tài chính thế giới 2015
• Format: Conference or Workshop Item
• Language: English
• Published: Trường Đại học Kinh tế 2020
• Subjects: Household deposits,; Banks; Credit institutions; Monetary financial institutions; Liquidity norms; Funding stability
• Online Access: http://repository.vnu.edu.vn/handle/VNU_123/97643
• Institution: Vietnam National University, Hanoi

The single funding stability regulations of the CRD IV package1 are the results of credit institutions’2 constraints during the last banking crisis. Before 2007, these entities were characterised by clear tendency to finance their dynamically increasing assets with short-term funds from wholesale markets. Such activity weakened their ability to deal with liquidity crisis and intensified systemic risk. Its ultimate result was the involvement of central banks to stabilize money markets and governments - to rescue individual credit institutions and to strengthen national deposit guarantee schemes. The access to long-term and stable funds, insensitive to changing environment, therefore turned out to be a guarantor of entities’ safety during the turmoil.