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Macroprudential policy with capital buffers
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| Authors and Corporations: | |
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| Type of Resource: | E-Book |
| Language: | English |
| published: |
[Ottawa]
Bank of Canada
[2019]
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| Series: |
Bank of Canada: Staff working paper ; 2019, 8 (February 2019)
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| Source: | Verbunddaten SWB Lizenzfreie Online-Ressourcen |
| Notes: | Zusammenfassung in französischer Sprache |
| 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. |
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| Physical Description: | 1 Online-Ressource (circa 50 Seiten); Illustrationen |
| Notes: | Zusammenfassung in französischer Sprache |