Lending between banks remains stifled, and demand for central-bank liquidity is consequently extremely high.
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But Mr Tucker did draw a clear distinction in his speech between bank capital and bank liquidity.
These accords are a global regulatory standard on bank minimum capital requirements, bank liquidity, and bank leverage.
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Moreover, Argentina was in the throes of recession, experiencing investor flight, high unemployment and a bank liquidity crisis.
He has ignored the example of Japan in the 1990s, when there was bank liquidity but little lending.
In addition, large capital outflows have undermined bank liquidity, making it harder to use the banks to finance expansion.
The massive risk-asset rally generated by a global central bank liquidity-bailout on Wednesday pushed gold back onto center stage.
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The leaked EU memo also frets about the potential effects on repurchase agreements, a key source of bank liquidity in Europe.
It admits that it looked at its rules on regulating bank liquidity back in 2003, and concluded it wasn't good enough.
But it remains to be seen whether liberal amounts of central-bank liquidity will encourage banks to do more than hoard cash.
French banks like Societe Generale, BNP Paribas, and Credit Agricole surged on the global central bank liquidity bailout presented last week.
The Bundesbank, Germany's central bank, which monitors bank liquidity, certainly does not.
Unlimited central-bank liquidity may help to reduce the gap, but only if banks do not find more reasons to question each other's creditworthiness.
Central bank liquidity policy needs refining and harmonising, as the Financial Stability Forum, a group of banking-industry regulators, made clear in a report in April.
It may mean that it averted disaster even if only a portion of the new bank liquidity is used to expand loans or purchase sovereign debt.
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If the European banking crisis or the U.S. economy turn problematic again, then even torrents of central bank liquidity will not offset an increased risk profile for underlying investments.
But because banks are using central-bank liquidity to plug holes in their short-term funding, the money multiplier is collapsing: even as reserves swell, broad-money and credit growth is wilting.
The announced intervention reassured markets that policymakers stood by to support banks, leading to rallies across Europe. (Read Coordinated Central Bank Liquidity Bailout For Euro Banks Feeds Global Rally).
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It was Hamilton Bolton, the BCA founder, who used the word supercycle, and he was referring generally to a lot of things, including money velocity, bank liquidity and interest rates.
This follows very highly correlated moves between both MSCI indices in 2012, and a backdrop of very supportive central bank liquidity, robust EM growth prospects and large portfolio inflows in January.
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Against the backdrop of improving employment, accelerating U.S. economic growth and the resolution of the European debt crisis, we are witnessing massive injections of central bank liquidity into the global financial system.
The central bank liquidity injection to help make it easier for European banks to access U.S. dollars is considered bullish for gold (and other hard assets) as more money is flushed into the global economy.
Similarly, Mr. King's relationship with the current government, which began warmly given his explicit approval of its fiscal plans, has also foundered, and on the same grounds: Faced with a banking system that was starving the economy of credit, Treasury and BOE officials had to work behind the scenes to persuade Mr. King to drop his dogmatic opposition to creating a bank-funding facility Funding for Lending and relaxing the U.K.'s draconian bank liquidity rules.
The new Basel rules are rightly designed to ensure bank capital and liquidity structures better reflect risks and reduce the systemic exposure for taxpayers.
Should the crisis extend beyond eight days and the European Central Bank pulls the liquidity it has been pumping into Cypriot banks, the ATMs may become cashless.
Now banks are forcing their counterparties to pay a much higher price to roll the paper over, and it is not clear how quickly central-bank injections of liquidity will ease the squeeze.
"The reserve ratio rise is a signal that the central bank is still in liquidity tightening mode and is very keen to control loan growth, " said a trader at a European bank in Shanghai.
"In the unlikely event that a generalised shortage of offshore renminbi liquidity emerges, the Bank will have the capability to provide renminbi liquidity to eligible institutions in the UK, " he said.
Thus the central bank of the United Arab Emirates has made it clear that it will provide liquidity to any bank, foreign or domestic, operating in the United Arab Emirates.
This is a shift from the Bank's previous public position, because the governor had previously suggested that liquidity from the Bank should indeed come with "strings attached" in the form of a relatively high interest rate.
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