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Bailing out the banks

Financial markets and financial institutions play a crucial role in the progress of an economy. Associate Professor Dr Eliza Wu, from the Discipline of Finance, is exploring the behaviours of these institutions in reaction to receiving government support.

In critical times, support is necessary to avoid bank failures and the significant associated costs to society. But according to Dr Wu, government support has led to excessive lending by banks, particularly to home buyers and property investors leading to high property prices in major capital cities.

This research seeks to understand how the relationship between governments support and capital standards can be improved, finding the perfect balance between financial stability and financial flexibility.


Listen to an interview with Associate Professor Eliza Wu to learn more.

Published work

Khan MS, Scheule H and Wu E 2017 'Funding liquidity and bank risk taking', Journal of Banking and Finance, vol.82, pp. 203-16