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http://dspace.mediu.edu.my:8181/xmlui/handle/10419/19739| Title: | Cyclical implications of minimum capital requirements |
| Keywords: | E32 G21 E44 ddc:330 minimum capital requirements regulatory capital economic capital capital buffer pro-cyclicality business cycle bank lending channel Eigenkapitalvorschriften Wirtschaftspolitische Wirkungsanalyse Bankbilanz Makroökonomischer Einfluß Theorie Konjunktur |
| Issue Date: | 16-Oct-2013 |
| Description: | Capital requirements play a key role in the supervision and regulation of banks. The Basel Committee on Banking Supervision is now changing the current framework by introducing risk-sensitive capital charges. There have been concerns that this will unduly increase volatility in the banks' capital. Furthermore, when the credit supply is rationed, capital requirements may exacerbate an economic downturn. We examine the problem of cyclicality in a macroeconomic model which explicitly takes regulatory constraints into account. We find that the capital buffer which banks hold on top of the required minimum plays a crucial role in mitigating the volatility in capital requirements. Therefore, despite the fact that capital charges may vary significantly over time, the effects on the macroeconomy will be moderate. |
| URI: | http://koha.mediu.edu.my:8181/xmlui/handle/10419/19739 |
| Other Identifiers: | http://hdl.handle.net/10419/19739 ppn:498456781 RePEc:zbw:bubdp2:4261 |
| Appears in Collections: | EconStor |
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