Anmerkungen:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments April 13, 2023 erstellt
Beschreibung:
I examine how changes to a bank's regulatory requirements affect liquidity creation. Using amendments in 2005 to the FDIC Improvement Act (FDICIA) and the Community Reinvestment Act (CRA), I document that treating each regulatory change as a separate event leads to confounding results. Ignoring the overlap of regulations, the results suggest that both regulations lead to increases in liquidity creation. However, after disentangling the effects of the two regulatory changes, I show that only the amendment to the CRA drives the results. Failure to disentangle the two changes leads to an overstatement of the increase in liquidity creation. Furthermore, I find no evidence that the regulatory change leads to outcomes contradictory to the purposes of the CRA