Arbeitspapier
The regulator's trade-off: Bank supervision vs. minimum capital
We develop a simple model of banking regulation with two policy instruments: minimum capital requirements and supervision of domestic banks. The regulator faces a trade-off: high capital requirements cause a drop in the banks'; profitability, while strict supervision reduces the scope of intermediation and is costly for taxpayers. We show that the expected costs of a banking crisis are minimised with a mix of both instruments. Once we allow for cross-border banking, the optimal policy is not feasible. If domestic supervisory effort is not observable, our model predicts a race to the bottom in banking regulation. Therefore, countries are better off by harmonising regulation on an international standard.
- Sprache
-
Englisch
- Erschienen in
-
Series: CESifo Working Paper ; No. 3923
- Klassifikation
-
Wirtschaft
Financial Aspects of Economic Integration
General Financial Markets: Government Policy and Regulation
Regulated Industries and Administrative Law
Economics of Regulation
- Thema
-
bank regulation
regulatory competition
supervision and capital requirements
Bankenpolitik
Basler Akkord
Bankenaufsicht
Policy-Mix
Bankenkrise
Institutioneller Wettbewerb
Theorie
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Buck, Florian
Schliephake, Eva
- Ereignis
-
Veröffentlichung
- (wer)
-
Center for Economic Studies and ifo Institute (CESifo)
- (wo)
-
Munich
- (wann)
-
2012
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:43 MEZ
Datenpartner
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.
Objekttyp
- Arbeitspapier
Beteiligte
- Buck, Florian
- Schliephake, Eva
- Center for Economic Studies and ifo Institute (CESifo)
Entstanden
- 2012