Author(s): Brito, Miguel Bordadágua Vieira de
Date: 2016
Persistent ID: http://hdl.handle.net/10362/16618
Origin: Repositório Institucional da UNL
Subject(s): Stock liquidity; Credit conditions; Monetary policy; Eurozone; Domínio/Área Científica::Ciências Sociais::Economia e Gestão
The recent financial crisis has drawn the attention of researchers and regulators to the importance of liquidity for stock market stability and efficiency. The ability of market-makers and investors to provide liquidity is constrained by the willingness of financial institutions to supply funding capital. This paper sheds light on the liquidity linkages between the Central Bank, Monetary Financial Institutions and market-makers as crucial elements to the well-functioning of markets. Results suggest the existence of causality between credit conditions and stock market liquidity for the Eurozone between 2003 and 2015. Similar evidence is found for the UK during the post-crisis period. Keywords: stock
