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Macroprudential policy with capital buffers

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Authors and Corporations: Schroth, Josef (Author)
Type of Resource: E-Book
Language: English
published:
[Ottawa] Bank of Canada [2019]
Series: Bank of Canada: Staff working paper ; 2019, 8 (February 2019)
Source: Verbunddaten SWB
Lizenzfreie Online-Ressourcen
Notes: Zusammenfassung in französischer Sprache
Description
Summary: This paper studies optimal bank capital requirements in a model of endogenous bank funding conditions. I find that requirements should be higher during good times such that a macroprudential "buffer" is provided. However, whether banks can use buffers to maintain lending during a financial crisis depends on the capital requirement during the subsequent recovery. The reason is that a high requirement during the recovery lowers bank shareholder value during the crisis and thus creates funding-market pressure to use buffers for deleveraging rather than for maintaining lending. Therefore, buffers are useful if banks are not required to rebuild them quickly.
Physical Description: 1 Online-Ressource (circa 50 Seiten); Illustrationen
Notes: Zusammenfassung in französischer Sprache