The Costs And Benefits Of Bank Capital Requirements
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Author | : Jihad Dagher |
Publisher | : International Monetary Fund |
Total Pages | : 38 |
Release | : 2016-03-03 |
Genre | : Business & Economics |
ISBN | : 1498387713 |
Download Benefits and Costs of Bank Capital Book in PDF, Epub and Kindle
The appropriate level of bank capital and, more generally, a bank’s capacity to absorb losses, has been at the core of the post-crisis policy debate. This paper contributes to the debate by focusing on how much capital would have been needed to avoid imposing losses on bank creditors or resorting to public recapitalizations of banks in past banking crises. The paper also looks at the welfare costs of tighter capital regulation by reviewing the evidence on its potential impact on bank credit and lending rates. Its findings broadly support the range of loss absorbency suggested by the Financial Stability Board (FSB) and the Basel Committee for systemically important banks.
Author | : Gianni De Nicolo |
Publisher | : |
Total Pages | : 15 |
Release | : 2018 |
Genre | : |
ISBN | : |
Download The Costs and Benefits of Bank Capital Requirements Book in PDF, Epub and Kindle
This paper presents empirical evidence on the impact of changes in capital requirements on bank lending, and delivers estimates of their costs and benefits in terms of foregone real GDP growth. The empirical analysis is based on large international datasets at a firm and country level, including data of the 2007-2009 crisis and beyond. I find that an increase in regulatory capital ratios reduces real GDP growth, with this reduction offsetting its benefits in terms of a reduced probability of a banking crisis. This evidence suggests that the net benefits of an increase in capital requirements may be negligible.
Author | : Douglas D Evanoff |
Publisher | : World Scientific |
Total Pages | : 385 |
Release | : 2017-09-22 |
Genre | : Business & Economics |
ISBN | : 9813223413 |
Download Achieving Financial Stability: Challenges To Prudential Regulation Book in PDF, Epub and Kindle
The Great Financial Crisis of 2007-2010 exposed the existence of significant imperfections in the financial regulatory framework that encouraged excessive risk-taking and increased system vulnerabilities. The resulting high cost of the crisis in terms of lost aggregate income and wealth, and increased unemployment has reinforced the need to improve financial stability within and across countries via changes in traditional microprudential regulation, as well as the introduction of new macroprudential regulations. Amongst the questions raised are:
Author | : William R. Cline |
Publisher | : |
Total Pages | : |
Release | : 2016 |
Genre | : |
ISBN | : |
Download Benefits and Costs of Higher Capital Requirements for Banks Book in PDF, Epub and Kindle
Author | : Mohamed Belkhir |
Publisher | : International Monetary Fund |
Total Pages | : 44 |
Release | : 2019-12-04 |
Genre | : Business & Economics |
ISBN | : 1513519808 |
Download Bank Capital and the Cost of Equity Book in PDF, Epub and Kindle
Using a sample of publicly listed banks from 62 countries over the 1991-2017 period, we investigate the impact of capital on banks’ cost of equity. Consistent with the theoretical prediction that more equity in the capital mix leads to a fall in firms’ costs of equity, we find that better capitalized banks enjoy lower equity costs. Our baseline estimations indicate that a 1 percentage point increase in a bank’s equity-to-assets ratio lowers its cost of equity by about 18 basis points. Our results also suggest that the form of capital that investors value the most is sheer equity capital; other forms of capital, such as Tier 2 regulatory capital, are less (or not at all) valued by investors. Additionally, our main finding that capital has a negative effect on banks’ cost of equity holds in both developed and developing countries. The results of this paper provide the missing evidence in the debate on the effects of higher capital requirements on banks’ funding costs.
Author | : |
Publisher | : Lulu.com |
Total Pages | : 294 |
Release | : 2004 |
Genre | : Bank capital |
ISBN | : 9291316695 |
Download International Convergence of Capital Measurement and Capital Standards Book in PDF, Epub and Kindle
Author | : Jihad Dagher |
Publisher | : |
Total Pages | : 38 |
Release | : 2016 |
Genre | : Bank capital |
ISBN | : 9781513538525 |
Download Benefits and Costs of Bank Capital Book in PDF, Epub and Kindle
The appropriate level of bank capital and, more generally, a bank’s capacity to absorb losses, has been at the core of the post-crisis policy debate. This paper contributes to the debate by focusing on how much capital would have been needed to avoid imposing losses on bank creditors or resorting to public recapitalizations of banks in past banking crises. The paper also looks at the welfare costs of tighter capital regulation by reviewing the evidence on its potential impact on bank credit and lending rates. Its findings broadly support the range of loss absorbency suggested by the Financial Stability Board (FSB) and the Basel Committee for systemically important banks.
Author | : William R. Cline |
Publisher | : Policy Analyses in International Economics |
Total Pages | : 241 |
Release | : 2017 |
Genre | : Asset requirements |
ISBN | : 9780881327212 |
Download The Right Balance for Banks Book in PDF, Epub and Kindle
William R. Cline analyzes whether reforms of capital requirements for banks have gone far enough. He calculates how much higher bank capital reduces the risk of banking crises. This study also challenges the recent "too much finance" literature, which holds that in advanced countries banking sectors are already too large and are curbing growth.
Author | : Mr.Andre Santos |
Publisher | : International Monetary Fund |
Total Pages | : 43 |
Release | : 2012-09-11 |
Genre | : Business & Economics |
ISBN | : 147551008X |
Download Estimating the Costs of Financial Regulation Book in PDF, Epub and Kindle
Staff Discussion Notes showcase the latest policy-related analysis and research being developed by individual IMF staff and are published to elicit comment and to further debate. These papers are generally brief and written in nontechnical language, and so are aimed at a broad audience interested in economic policy issues. This Web-only series replaced Staff Position Notes in January 2011.
Author | : Simon Firestone |
Publisher | : |
Total Pages | : 0 |
Release | : 2017 |
Genre | : |
ISBN | : |
Download An Empirical Economic Assessment of the Costs and Benefits of Bank Capital in the Us Book in PDF, Epub and Kindle
We evaluate the economic costs and benefits for bank capital levels in the United States. The framework and analysis is similar to that found in previous studies though we tailor the analysis to the specific features and experience of the U.S. financial system and account for the impact of new financial regulations. The conceptual framework identifies the benefits of bank capital with a lower probability of financial crises, which result in decreased economic output. The costs of bank capital are identified with increases in banks cost of funding, which are passed along to borrowers and result in a lower level of economic output. Optimal capital maximize the difference between benefits and costs or net benefits. Using a range of empirical estimates of net benefits we find that the optimal level of bank capital in the United States ranges from just over 13 percent to over 26 percent.