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Author: Michael Wedow Publisher: ISBN: 9783832512262 Category : Languages : en Pages : 0
Book Description
Banking is one of the most regulated industries. The arguments for an extensive regulation of the banking industry are rooted in the importance of banks in financing economic development and the economic costs associated with financial instability in the banking system. In order to design an adequate regulatory framework that ensures financial stability it is decisive to understand the impact of regulation on banks' risk taking. As a starting point, I review the literature on the various instruments of bank regulation with a particular focus on capital regulation. In chapter 3, I provide the reader with a description of the banking system and the regulatory framework in Germany. Chapter 4 examines the role of banks' capitalization for their lending supply. I find that weak capitalization of banks did not slow down lending supply. In chapter 5, I analyze the impact of minimum capital requirements under Basel 2 on bank lending to emerging markets. The results confirm that bank lending will not be subject to dramatic shifts due to a reform in capital regulation.
Author: Michael Wedow Publisher: ISBN: 9783832512262 Category : Languages : en Pages : 0
Book Description
Banking is one of the most regulated industries. The arguments for an extensive regulation of the banking industry are rooted in the importance of banks in financing economic development and the economic costs associated with financial instability in the banking system. In order to design an adequate regulatory framework that ensures financial stability it is decisive to understand the impact of regulation on banks' risk taking. As a starting point, I review the literature on the various instruments of bank regulation with a particular focus on capital regulation. In chapter 3, I provide the reader with a description of the banking system and the regulatory framework in Germany. Chapter 4 examines the role of banks' capitalization for their lending supply. I find that weak capitalization of banks did not slow down lending supply. In chapter 5, I analyze the impact of minimum capital requirements under Basel 2 on bank lending to emerging markets. The results confirm that bank lending will not be subject to dramatic shifts due to a reform in capital regulation.
Author: Stéphanie M. Stolz Publisher: Springer Science & Business Media ISBN: 3540485457 Category : Business & Economics Languages : en Pages : 163
Book Description
The year-long consultations on Basel II mirror the international popularity of capital requirements as a regulatory instrument. Yet, the impact of capital requirements on banks' behavior is not fully understood. The aim of this study is to contribute to this understanding.
Author: Sophia Velez Publisher: Routledge ISBN: 1000180123 Category : Business & Economics Languages : en Pages : 139
Book Description
Due to a historical lack of attention to the importance of modelling, measuring and managing risk, senior bank leaders are struggling to implement unified practices within their financial institutions that could address the gaps posed by risky management behaviour, rogue trading, liquidity crises, prohibited investments in mortgage-backed securities, and default risks aligned with loans. This book discusses the theories at play between bank agents (bank managers) and their principals (shareholders), a topic which has gained importance as a result of the banking crisis, and similarly, governed the need for more efficient risk management and ethical managerial practices. The author worked with a senior bank leadership team to identify and describe effective capital regulation practices that can lead to a reduction in loss and risky management behavioural practices. The book offers consensus on a number of activities that bank managers can implement to address bank risk. It analyses the relevant factors that determine the necessity for banking regulation and the important role of regulation in managing banking crises. The author’s analysis of the important regulatory aspects in developed countries such as the US, offers a useful conceptual framework for creating an adequate banking regulatory environment in developing countries. This book offers an original contribution to the field of banking that undergraduate, masters, PhD students, academics and researchers can use to gain a deeper understanding of the constructs at play in the banking industry.
Author: Mr.Luc Laeven Publisher: International Monetary Fund ISBN: 1455210838 Category : Business & Economics Languages : en Pages : 38
Book Description
We provide a theoretical foundation for the claim that prolonged periods of easy monetary conditions increase bank risk taking. The net effect of a monetary policy change on bank monitoring (an inverse measure of risk taking) depends on the balance of three forces: interest rate pass-through, risk shifting, and leverage. When banks can adjust their capital structures, a monetary easing leads to greater leverage and lower monitoring. However, if a bank's capital structure is fixed, the balance depends on the degree of bank capitalization: when facing a policy rate cut, well capitalized banks decrease monitoring, while highly levered banks increase it. Further, the balance of these effects depends on the structure and contestability of the banking industry, and is therefore likely to vary across countries and over time.
Author: Frederik Lundtofte Publisher: ISBN: Category : Languages : en Pages : 44
Book Description
A simple portfolio choice model shows that, when a bank's capital is constrained by regulation, regulatory cost (risk weightings) alters the risk and value calculations for the bank's assets. In particular, we find that banks may respond to stricter regulation by increasing the share of high-risk assets. Our empirical results show that U.S. banks responded to the implementation of the stricter Basel II regulations by increasing the share of high-risk assets in the risky part of their portfolios.
Author: Alistair Milne Publisher: ISBN: Category : Languages : en Pages : 52
Book Description
We analyse the incentive impact of bank capital regulation in a model with endogenous capital, assuming regulators randomly audit banks and require undercapitalised banks either to bear the fixed cost of new issue or to liquidate. Forward looking banks with sufficient franchise value maintain a buffer of capital in excess of the regulatory minimum. In our dynamic setting we show, amongst other results: that incentives for risk taking depend upon this buffer of free capital, not the total level; and that the regulatory capital requirement has no long run effect on bank risk-taking.
Author: Michael Wedow
Author: Michael Wedow
Author: Stéphanie M. Stolz
Author: Frederick T. Furlong
Author: Stéphanie Stolz
Author: 
Author: Paul S. Calem
Author: Sophia Velez
Author: Mr.Luc Laeven
Author: Frederik Lundtofte
Author: Alistair Milne