Arbeitspapier
Supranational rules, national discretion: Increasing versus inflating regulatory bank capital?
We study how higher capital requirements introduced at the supranational level affect the regulatory capital of banks across countries. Using the 2011 EBA capital exercise as a quasi-natural experiment, we find that treated banks exploit discretion in the calculation of regulatory capital to inflate their capital ratios without a commensurate increase in their book equity and without a reduction in bank risk. Regulatory capital inflation is more pronounced in countries where credit supply is expected to tighten, suggesting that national authorities forbear their domestic banks to meet supranational requirements, with a focus on short-term economic considerations.
- Language
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Englisch
- Bibliographic citation
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Series: SAFE Working Paper ; No. 296
- Classification
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Wirtschaft
- Event
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Geistige Schöpfung
- (who)
-
Gropp, Reint
Mosk, Thomas
Ongena, Steven
Simac, Ines
Wix, Carlo
- Event
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Veröffentlichung
- (who)
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Leibniz Institute for Financial Research SAFE
- (where)
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Frankfurt a. M.
- (when)
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2020
- DOI
-
doi:10.2139/ssrn.3736781
- Handle
- Last update
-
10.03.2025, 11:43 AM CET
Data provider
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ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Gropp, Reint
- Mosk, Thomas
- Ongena, Steven
- Simac, Ines
- Wix, Carlo
- Leibniz Institute for Financial Research SAFE
Time of origin
- 2020
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The Supranational Rule of Law : Taking Stock
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Rules versus discretion in fiscal policy
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The Supranational Rule of Law : Thinking the Future
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Rules and discretion in international economic policy