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
978-952-462-619-4

Erschienen in
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

Dieses Objekt wird bereitgestellt von:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.

Objekttyp

  • Arbeitspapier

Beteiligte

  • Jokivuolle, Esa
  • Kiema, Ilkka
  • Vesala, Timo
  • Bank of Finland

Entstanden

  • 2010

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