02080cas a2200277 a 4500 AALejournalIMF013258 230101c9999 xx r poo 0 0eng d 5.00 USD 9781616356675 1018-5941 BD-DhAAL BD-DhAAL Delechat, Corinne. The Determinants of Banks' Liquidity Buffers in Central America / Corinne Delechat, Camila Henao Arbelaez, Priscilla Muthoora, Svetlana Vtyurina. Washington, D.C. : International Monetary Fund, 2012. 1 online resource (43 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students Banks' liquidity holdings are comfortably above legal or prudential requirements in most Central American countries. While good for financial stability, high systemic liquidity may nonetheless hinder monetary policy transmission and financial markets development. Using a panel of about 100 commercial banks from the region, we find that the demand for precautionary liquidity buffers is associated with measures of bank size, profitability, capitalization, and financial development. Deposit dollarization is also associated with higher liquidity, reinforcing the monetary policy and market development challenges in highly dollarized economies. Improvements in supervision and measures to promote dedollarization, including developing local currency capital markets, would help enhance financial systems' efficiency and promote intermediation in the region. Mode of access: Internet Henao Arbelaez, Camila. Muthoora, Priscilla. Vtyurina, Svetlana. IMF Working Papers; Working Paper ; No. 2012/301 Full text available on IMF http://elibrary.imf.org/view/journals/001/2012/301/001.2012.issue-301-en.xml IMF e-Library