Non-Core Bank Liabilities and Financial Vulnerability
A lending boom is reflected in the composition of bank liabilities when traditional retail deposits (core liabilities) cannot keep pace with asset growth and banks turn to other funding sources (non-core liabilities) to finance their lending. We formulate a model of credit supply as the flip side of a credit risk model where a large stock of non-core liabilities serves as an indicator of the erosion of risk premiums and hence of vulnerability to a crisis. We find supporting empirical evidence in a panel probit study of emerging and developing economies.
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Copy CitationJoon-Ho Hahm, Hyun Song Shin, and Kwanho Shin, "Non-Core Bank Liabilities and Financial Vulnerability," NBER Working Paper 18428 (2012), https://doi.org/10.3386/w18428.
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Published Versions
JoonâHo Hahm & Hyun Song Shin & Kwanho Shin, 2013. "Noncore Bank Liabilities and Financial Vulnerability," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 45, pages 3-36, 08. citation courtesy of 
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