{
  "title": "Reserve Requirements, the Maturity Structure of Debt, and Bank Runs",
  "publication": "IMF Working Papers, April 1, 2008",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2016/12/31/reserve-requirements-the-maturity-structure-of-debt-and-bank-runs-21883",
  "canonical": "https://www.imf.org/en/publications/wp/issues/2016/12/31/reserve-requirements-the-maturity-structure-of-debt-and-bank-runs-21883",
  "overlayPath": "/en/publications/wp/issues/2016/12/31/reserve-requirements-the-maturity-structure-of-debt-and-bank-runs-21883/index.md",
  "summary": "The paper looks at the relationship between reserve requirements and the choice of the maturity structure of external debt in a general equilibrium setup, by incorporating the role of international lenders.",
  "sections": [
    {
      "heading": "Summary and theoretical setup",
      "content": "- Paper examines the relationship between reserve requirements and the choice of the maturity structure of external debt in a general equilibrium setup, incorporating the role of international lenders.\n- A date- and maturity-specific reserve requirement is defined as a fraction of the debt to be deposited in a non-interest bearing account at the central bank. At maturity, the central bank returns the reserves.\n- There exist some specific combinations of date- and maturity-specific reserve requirements that reduce the vulnerability to bank runs.\n- Under those combinations, international lenders may still want to provide new short-term lending to the bank after a bank run."
    },
    {
      "heading": "Key findings",
      "content": "- Specific date- and maturity-specific reserve requirement schedules can mitigate fragility associated with short-term external debt.\n- Reserve requirements operate by requiring a fraction of debt to be parked in a non-interest bearing central bank account until maturity, affecting incentives for roll-over and lender behavior.\n- Even when vulnerabilities are reduced, the model allows for continued provision of new short-term lending by international lenders in the aftermath of a bank run under some parameter combinations."
    },
    {
      "heading": "Policy implications and interpretation",
      "content": "- Carefully designed date- and maturity-specific reserve requirements can be a tool to reduce the probability or severity of bank runs tied to the maturity structure of external debt.\n- Policymakers should consider maturity- and date-specific calibration of reserve requirements as part of a broader framework addressing short-term external borrowing and cross-border lender behavior."
    },
    {
      "heading": "Publication and metadata",
      "content": "- Author: Eza Ghassan Al-Zein\n- Date: April 1, 2008\n- Series: Working Paper No. 2008/108\n- Issue: 108\n- Volume: 2008\n- Pages: 26\n- DOI: https://doi.org/10.5089/9781451869682.001\n- Stock No: WPIEA2008108\n- ISBN: 9781451869682\n- ISSN: 1018-5941\n- Subjects: Banking, Bonds, Capital controls, Real interest rates, Reserve requirements\n- Keywords: bank run, real interest rate, short-term debt, WP\n\nIMF Working Papers — Reserve Requirements, the Maturity Structure of Debt, and Bank Runs (Eza Ghassan Al-Zein, April 1, 2008).\n\n---\n\n Content in this bundle\n\n- Wp08108\n  - Wp08108 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Wp08108 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2016/12/31/reserve-requirements-the-maturity-structure-of-debt-and-bank-runs-21883"
    }
  ],
  "bullets": [
    "[Markdown version](/en/publications/wp/issues/2016/12/31/reserve-requirements-the-maturity-structure-of-debt-and-bank-runs-21883/index.md)",
    "[Structured JSON version](/en/publications/wp/issues/2016/12/31/reserve-requirements-the-maturity-structure-of-debt-and-bank-runs-21883/index.json)",
    "[Bundle manifest](/en/publications/wp/issues/2016/12/31/reserve-requirements-the-maturity-structure-of-debt-and-bank-runs-21883/bundle-manifest.json)",
    "Authors: Eza Ghassan Al-Zein",
    "Published: April 1, 2008",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781451869682.001",
    "Paper examines the relationship between reserve requirements and the choice of the maturity structure of external debt in a general equilibrium setup, incorporating the role of international lenders.",
    "A date- and maturity-specific reserve requirement is defined as a fraction of the debt to be deposited in a non-interest bearing account at the central bank. At maturity, the central bank returns the reserves.",
    "There exist some specific combinations of date- and maturity-specific reserve requirements that reduce the vulnerability to bank runs.",
    "Under those combinations, international lenders may still want to provide new short-term lending to the bank after a bank run.",
    "Specific date- and maturity-specific reserve requirement schedules can mitigate fragility associated with short-term external debt.",
    "Reserve requirements operate by requiring a fraction of debt to be parked in a non-interest bearing central bank account until maturity, affecting incentives for roll-over and lender behavior.",
    "Even when vulnerabilities are reduced, the model allows for continued provision of new short-term lending by international lenders in the aftermath of a bank run under some parameter combinations.",
    "Carefully designed date- and maturity-specific reserve requirements can be a tool to reduce the probability or severity of bank runs tied to the maturity structure of external debt.",
    "Policymakers should consider maturity- and date-specific calibration of reserve requirements as part of a broader framework addressing short-term external borrowing and cross-border lender behavior.",
    "Author: Eza Ghassan Al-Zein",
    "Date: April 1, 2008",
    "Series: Working Paper No. 2008/108",
    "Issue: 108",
    "Volume: 2008",
    "Pages: 26",
    "DOI: https://doi.org/10.5089/9781451869682.001",
    "Stock No: WPIEA2008108",
    "ISBN: 9781451869682",
    "ISSN: 1018-5941",
    "Subjects: Banking, Bonds, Capital controls, Real interest rates, Reserve requirements",
    "Keywords: bank run, real interest rate, short-term debt, WP",
    "**Wp08108**"
  ],
  "related": [
    {
      "title": "Wp08108",
      "role": "document",
      "sourceUrl": "https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2008/_wp08108.pdf",
      "summary": {
        "path": "/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2008/_wp08108.pdf.md",
        "mime": "text/markdown"
      },
      "binary": {
        "path": "/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2008/_wp08108.pdf",
        "mime": "application/pdf"
      }
    }
  ],
  "alternates": {
    "markdown": "/en/publications/wp/issues/2016/12/31/reserve-requirements-the-maturity-structure-of-debt-and-bank-runs-21883/index.md",
    "json": "/en/publications/wp/issues/2016/12/31/reserve-requirements-the-maturity-structure-of-debt-and-bank-runs-21883/index.json",
    "bundleManifest": "/en/publications/wp/issues/2016/12/31/reserve-requirements-the-maturity-structure-of-debt-and-bank-runs-21883/bundle-manifest.json"
  },
  "generatedAtUtc": "2026-09-18T04:55:18.242Z"
}