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Did the occurrence of systemic banking crises in the 1990s and 2000s significantly alter the behavior of banks in the Mercosur? The objective of this paper is to answer this question by analyzing changes in bank behavior after crises in the Mercosur region. To our knowledge, this is the first paper to apply the convergence methodology-which is common in the growth literature-to post-crisis bank behavior. Using a panel dataset of commercial banks during the period 1990-2006, we analyze the impact of crises on four sets of financial indicators of bank behavior-profitability, maturity preference, credit supply, and risk. The paper finds that most indicators of bank behavior, such as profitability, in fact revert to previous or more normal levels. However, a key finding of the paper is that private sector intermediation is significantly reduced for prolonged periods of time and that high levels excess liquidity persist well after the crisis.

Banks and banking. --- Convergence (Economics) --- Economic convergence --- Agricultural banks --- Banking --- Banking industry --- Commercial banks --- Depository institutions --- Economics --- Finance --- Financial institutions --- Money --- Banks and Banking --- Financial Risk Management --- Money and Monetary Policy --- Macroeconomics --- Banks --- Depository Institutions --- Micro Finance Institutions --- Mortgages --- Financial Institutions and Services: Government Policy and Regulation --- Financing Policy --- Financial Risk and Risk Management --- Capital and Ownership Structure --- Value of Firms --- Goodwill --- Bankruptcy --- Liquidation --- Monetary Policy, Central Banking, and the Supply of Money and Credit: General --- Financial Crises --- Monetary economics --- Economic & financial crises & disasters --- Bank credit --- Financial crises --- Credit --- Banking crises --- Systemic crises --- Banks and banking --- Argentina

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This paper analyses the prudential liquidity management framework, in particular the quantitative indicators employed by the central bank of Rwanda in response to the domestic liquidity crisis in 2008/09. It emphasises that the quantitative methods used in the monitoring and assessment of systemic liquidity risk are inadequate because they did not signal the liquidity crises ex-post. There are quick gains to be made from augumenting the liquidity risk indicators with more dynamic liquidity stress tests so that compliance will be achieved through lengthening the maturities of both assets and liabilities on the balance sheet as opposed to simply holding more liquid assets. The paper recommends that policy emphasis shift toward reforms that strengthen systemic liquidity risk assesment, monetary policy implementation as well as improve the efficiency of Rwanda's financial system.

Financial risk management --- Liquidity (Economics) --- Banks and banking, Central --- Banks and banking --- Global Financial Crisis, 2008-2009 --- Global Economic Crisis, 2008-2009 --- Subprime Mortgage Crisis, 2008-2009 --- Financial crises --- Agricultural banks --- Banking --- Banking industry --- Commercial banks --- Depository institutions --- Finance --- Financial institutions --- Money --- Banker's banks --- Banks, Central --- Central banking --- Central banks --- Assets, Frozen --- Frozen assets --- Risk management --- Econometric models. --- State supervision --- Banks and Banking --- Finance: General --- Portfolio Choice --- Investment Decisions --- Banks --- Depository Institutions --- Micro Finance Institutions --- Mortgages --- Financing Policy --- Financial Risk and Risk Management --- Capital and Ownership Structure --- Value of Firms --- Goodwill --- Financial Institutions and Services: Government Policy and Regulation --- Financial services law & regulation --- Liquidity --- Liquidity risk --- Liquidity indicators --- Asset and liability management --- Financial regulation and supervision --- Liquidity management --- Liquidity stress testing --- Financial sector policy and analysis --- Economics --- Rwanda