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Jan 22, 2015 · Capital regulation acts as an external force in the determination of bank capital and risk levels. Changes in the regulatory framework can influence banks’ decisions. Starting from the debate of the prudential regulation after the financial crisis, this paper reviews the main empirical contributions on the role of capital regulation in the determination of banks’ capital ratios and risk ...
- Bank Capital Regulation: Theory, Empirics, and Policy
Minimum equity ratio requirements promote bank stability,...
- Bank Capital Regulation: Theory, Empirics, and Policy
Oct 1, 2024 · The BRSS offers a comprehensive overview of the evolution in bank capital regulations and bank risk after the global financial crisis (Anginer et al., 2019). 1 We complement the analyses with bank-level data from around 13,800 banks for up to 126 jurisdictions to uncover evidence on how the quality of bank capital affects individual bank risk ...
- Deniz Anginer, Ata Can Bertay, Robert Cull, Asli Demirgüç-Kunt, Davide S. Mare, Davide S. Mare
- 2021
This study investigates the link between capital regulation and bank risk-taking. Using a sample of over 1,800 banks in 135 countries, I find that the relationship between capital regulation and bank risk-taking (measured by z-score) is an inverse ‘U’ shape. That is, as capital ratios increase, a bank will take less risk initially, then ...
- Roshanthi Dias
- 2021
Bank capital and socially optimal regulation. A bank’s decision to fund its lending activities through either equity or debt depends on two conflicting factors: Equity is costlier than debt. Bank shareholders face greater risks than debt holders and, as a result, require a higher expected return.
- Alejandro García, Josef Schroth
- 2021
Oct 13, 2015 · Minimum equity ratio requirements promote bank stability, but compliance must be measured credibly and requirements must be commensurate with risk. A mix of higher book equity requirements, a carefully designed contingent capital requirement, cash reserve requirements, and other measures, would address prudential objectives better than book equity requirements alone. Basel III’s ill-defined ...
- Shekhar Aiyar, Charles W Calomiris, Tomasz Wieladek
- 2015
In particular, capital requirements seem to reduce risk, unless banks operate in a highly competitive environment during and in the aftermath of a crisis. In this scenario, stricter capital requirements could increase bank risk exposure. Laeven et al. provide empirical evidence on the role played by size. Specifically, they show that the level ...
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Apr 1, 2020 · Specifically considering the regulation of bank capital, extant studies have found that the factors, such as bank corporate governance (Laeven and Levine, 2009), bank market power (Agoraki et al., 2011), bank structure (Klomp and De Haan, 2015) and country-level institutional quality (Bermpei et al., 2018), significantly condition the impact of capital regulation on bank risk. Surprisingly ...
