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Bank capital buffers in a dynamic model

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Authors and Corporations: Mankart, Jochen (Author), Michaelides, Alexander G. (Author), Pagratis, Spyros (Author)
Other Authors: Michaelides, Alexander G. 1969- [Author] • Pagratis, Spyros [Author]
Type of Resource: E-Book
Language: English
published:
Frankfurt am Main Deutsche Bundesbank [2019]
Series: Deutsche Bundesbank: Discussion paper ; no 2018, 51
Source: Verbunddaten SWB
Lizenzfreie Online-Ressourcen
ISBN: 9783957295316
3957295319
Description
Summary: We estimate a dynamic structural banking model to examine the interaction between risk-weighted capital adequacy and unweighted leverage requirements, their differential impact on bank lending, and equity buffer accumulation in excess of regulatory minima. Tighter risk-weighted capital requirements reduce loan supply and lead to an endogenous fall in bank profitability, reducing bank incentives to accumulate equity buffers and, therefore, increasing the incidence of bank failure. Tighter leverage requirements, on the other hand, increase lending, preserve bank charter value and incentives to accumulate equity buffers, therefore leading to lower bank failure rates.
Physical Description: 1 Online-Ressource (circa 43 Seiten); Illustrationen
ISBN: 9783957295316
3957295319