Arbeitspapier
Credit allocation, capital requirements and output
We show how banks excessive risk-taking, stemming from informational asymmetries in loan markets, can lead to an excessive output loss when a recession starts. Risk-based capital requirements can alleviate the output loss by reducing excessive risk-taking in normal times. Model simulations suggest that the differentiation of risk-weights in the Basel framework might be further increased in order to take full advantage of the allocational effects of capital requirements. Our analysis also provides a new rationale for the countercyclical elements of capital requirements.
- Sprache
-
Englisch
- ISBN
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978-952-462-619-4
- Erschienen in
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Series: Bank of Finland Research Discussion Papers ; No. 17/2010
- Klassifikation
-
Wirtschaft
Market Structure, Pricing, and Design: Perfect Competition
Asymmetric and Private Information; Mechanism Design
Information and Market Efficiency; Event Studies; Insider Trading
Banks; Depository Institutions; Micro Finance Institutions; Mortgages
Financial Institutions and Services: Government Policy and Regulation
- Thema
-
bank regulation
Basel III
capital requirements
credit risk
crises
procyclicality
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Jokivuolle, Esa
Kiema, Ilkka
Vesala, Timo
- Ereignis
-
Veröffentlichung
- (wer)
-
Bank of Finland
- (wo)
-
Helsinki
- (wann)
-
2010
- Handle
- Letzte Aktualisierung
-
20.09.2024, 08:24 MESZ
Datenpartner
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Objekttyp
- Arbeitspapier
Beteiligte
- Jokivuolle, Esa
- Kiema, Ilkka
- Vesala, Timo
- Bank of Finland
Entstanden
- 2010