An Index of Bank Liquidity Creation: An Application to the Banking Systems of the Eurozone and the Liquidity Policy of the ECB during the Euro Crisis

  • Pierluigi Morelli
  • Giovanni B. Pittaluga
  • Elena Seghezza
Part of the Palgrave Macmillan Studies in Banking and Financial Institutions book series (SBFI)


The main function of banks is maturity transformation. By performing this function banks create liquidity. They lend illiquid loans to borrowers of funds, and in the face of these they emit liabilities which may be withdrawn at any time at par value (Bryant, 1980; Diamond and Dybvig, 1983; Holmstrom and Tirole, 1998).


Central Bank Banking System Liquidity Risk Banking Supervision Liquidity Index 
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© Pierluigi Morelli, Giovanni B. Pittaluga and Elena Seghezza 2015

Authors and Affiliations

  • Pierluigi Morelli
  • Giovanni B. Pittaluga
  • Elena Seghezza

There are no affiliations available

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