Liquidity, credit creation and international banking: an econometric investigation


McKenzie, George and Thomas, Stephen (1983) Liquidity, credit creation and international banking: an econometric investigation. Journal of Banking and Finance, 7, (4), 467-480. (doi:10.1016/0378-4266(83)90005-5).

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Description/Abstract

For the past 18 months the Treasury and Civil Service Select Committee of the British House of Commons has been taking evidence from expert witnesses and interested parties concerning International Monetary Arrangements. An important concern of their work has been the inter-relationship between current problems in international bank lending and macroeconomic policies. Our presentation will review the opinions expressed in the Committee's Reports in the light of the econometric evidence we have obtained in our formal paper prepared for this conference. Basically we feel that the current problems facing the international banking system are in no small part due to the increased systematic risk introduced into the system by the macroeconomic policies followed by the industrial countries over the past decade, rather than simply to reckless and imprudent bank management. Further, our econometric evidence suggests that Eurocurrency flows may have a substantial effect on domestic liquidity, in contrast to the accepted view that such flows are unimportant. An underlying major theme of our paper concerns the importance of using modern econometric methods to shed light on current important problems of international financial interdependence.

Item Type: Article
ISSNs: 0378-4266 (print)
Related URLs:
Subjects: H Social Sciences > HD Industries. Land use. Labor > HD28 Management. Industrial Management
J Political Science > JZ International relations
H Social Sciences > HB Economic Theory
Divisions: University Structure - Pre August 2011 > School of Management
ePrint ID: 37398
Date Deposited: 28 Feb 2007
Last Modified: 27 Mar 2014 18:23
URI: http://eprints.soton.ac.uk/id/eprint/37398

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