Arbeitspapier
Liquidity support and distress resilience in bank-affiliated mutual funds
Flows of funds run by banks or by firms that belong to the same financial group as a bank are less volatile and less sensitive to bad past performance. This enables bank-affiliated funds to better weather distress and to hold lower precautionary cash buffers in comparison with their unaffiliated peers. Banks provide liquidity support to distressed affiliated funds by buying shares of those funds that are experiencing large outflows. This, in turn, diminishes the severity of strategic complementarities in investors' redemptions. Liquidity support and other benefits of bank affiliation are conditional on the financial health of the parent company. Distress in the banking system spills over to the mutual fund sector via ownership links. Our research highlights substantial dependencies between the banking system and the asset management industry, and identifies an important channel via which financial stability risks depend on the organisational structure of the financial sector.
- Sprache
-
Englisch
- ISBN
-
978-92-899-5995-7
- Erschienen in
-
Series: ECB Working Paper ; No. 2799
Pension Funds; Non-bank Financial Institutions; Financial Instruments; Institutional Investors
Bank affiliation
Redemptions
Fecht, Falko
Maddaloni, Angela
- DOI
-
doi:10.2866/532596
- Handle
- Letzte Aktualisierung
-
20.09.2024, 08:21 MESZ
Objekttyp
- Arbeitspapier
Beteiligte
- Bagattini, Giulio
- Fecht, Falko
- Maddaloni, Angela
- European Central Bank (ECB)
Entstanden
- 2023
Ähnliche Objekte (12)
Liquidity support and distress resilience in bank-affiliated mutual funds
The fire-sale channels of universal banks in the European sovereign debt crisis
The dark and the bright side of liquidity risks: evidence from open-end real estate funds in Germany
On the Stability of Different Financial Systems
On the Stability of Different Financial Systems
Open-end real estate funds in Germany: genesis and crisis
Banks, markets, and efficiency
Optimal lender of last resort policy in different financial systems
Banks, Markets, and Financial Stability
Banks, markets, and efficiency
Financial fragility in open-ended mutual funds: The role of liquidity management tools
Substitution between net and gross settlement systems: A concern for financial stability?
Liquidity support and distress resilience in bank-affiliated mutual funds
The fire-sale channels of universal banks in the European sovereign debt crisis
The dark and the bright side of liquidity risks: evidence from open-end real estate funds in Germany
On the Stability of Different Financial Systems
On the Stability of Different Financial Systems
Open-end real estate funds in Germany: genesis and crisis
Banks, markets, and efficiency
Optimal lender of last resort policy in different financial systems
Banks, Markets, and Financial Stability
Banks, markets, and efficiency
Financial fragility in open-ended mutual funds: The role of liquidity management tools
Substitution between net and gross settlement systems: A concern for financial stability?
Liquidity support and distress resilience in bank-affiliated mutual funds
The fire-sale channels of universal banks in the European sovereign debt crisis
The dark and the bright side of liquidity risks: evidence from open-end real estate funds in Germany
On the Stability of Different Financial Systems
On the Stability of Different Financial Systems
Open-end real estate funds in Germany: genesis and crisis
Banks, markets, and efficiency
Optimal lender of last resort policy in different financial systems
Banks, Markets, and Financial Stability
Banks, markets, and efficiency
Financial fragility in open-ended mutual funds: The role of liquidity management tools