02054cas a2200277 a 4500 AALejournalIMF014810 230101c9999 xx r poo 0 0eng d 5.00 USD 9781498352888 1018-5941 BD-DhAAL BD-DhAAL Karam, Philippe. The Transmission of Liquidity Shocks : The Role of Internal Capital Markets and Bank Funding Strategies / Philippe Karam, Ouarda Merrouche, Moez Souissi, Rima Turk. Washington, D.C. : International Monetary Fund, 2014. 1 online resource (38 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 We analyze the transmission of bank-specific liquidity shocks triggered by a credit rating downgrade through the lending channel. Using bank-level data for US Bank Holding Companies, we find that a credit rating downgrade is associated with an immediate and persistent decline in access to non-core deposits and wholesale funding, especially during the global financial crisis. This translates into a reduction in lending to households and non-financial corporates at home and abroad. The effect on domestic lending, however, is mitigated when banks (i) hold a larger buffer of liquid assets, (ii) diversify away from rating-sensitive sources of funding, and (iii) activate internal liquidity support measures. Foreign lending is significantly reduced during a crisis at home only for subsidiaries with weak funding self-sufficiency. Mode of access: Internet Merrouche, Ouarda. Souissi, Moez. Turk, Rima. IMF Working Papers; Working Paper ; No. 2014/207 Full text available on IMF http://elibrary.imf.org/view/journals/001/2014/207/001.2014.issue-207-en.xml IMF e-Library