Liquidity creation in dual banking systems: Do insolvency reforms matter?

Puntos clave

• Liquidity creation is enhanced with the implementation of insolvency reforms, affecting dual banking systems.
• A study across various regions shows a significant improvement in liquidity levels post-reform implementation.
• Analysis of banking operations emphasizes the impact of insolvency reforms on financial stability.
• The findings suggest stronger regulations could lead to better performance in dual banking systems.