Reforming the Regulatory Treatment of Sovereign Exposures in Banking Regulation

The European sovereign debt crisis has shown the tight linkage between sovereign and bank balance sheets. In the aftermath of the crisis, several reforms have been discussed in order to mitigate the sovereign-bank nexus. These reforms include the abolishment of preferential government bond treatment in banking regulation. This paper gives a detailed overview of literature and data which are closely related to the existing preferential sovereign bond treatment in bank regulation and highlights the need for reforms especially in the euro area. Against this background, the following three regulatory reforms are described and discussed: (i) positive risk weights for government bonds in bank capital regulation, (ii) sovereign exposure limits, and (iii) haircuts for government bonds in bank liquidity regulation. The discussion focusses on the effects of these reforms for bank behaviour and financial stability.

Standort
Deutsche Nationalbibliothek Frankfurt am Main
Umfang
Online-Ressource
Sprache
Englisch

Erschienen in
Reforming the Regulatory Treatment of Sovereign Exposures in Banking Regulation ; volume:53 ; number:1 ; year:2020 ; pages:81-122
Credit and capital markets ; 53, Heft 1 (2020), 81-122

Urheber
Sterzel, André

DOI
10.3790/ccm.53.1.81
URN
urn:nbn:de:101:1-2022101115273004177204
Rechteinformation
Open Access; Der Zugriff auf das Objekt ist unbeschränkt möglich.
Letzte Aktualisierung
15.08.2025, 07:26 MESZ

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Beteiligte

  • Sterzel, André

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