Macroprudential banking regulation: Does one size fit all?

Arbeitspapier

The macroprudential regulatory framework of Basel III imposes the same capital and liquidity requirements on all banks around the world to ensure global competitiveness of banks. Using an agent-based model of the financial system, we find that this is not a robust framework to achieve (inter)national financial stability, because efficient regulation has to embrace the economic structure and behaviour of financial market participants, which differ from country to country. Market-based financial systems do not profit from capital and liquidity regulations, but from a ban on proprietary trading (Volcker rule). In homogeneous or bank-based financial systems, the most effective regulatory policy to ensure financial stability depends on the stability measure used. Irrespective of financial system architecture, direct restrictions of banks' investment portfolios are more effective than indirect restrictions through capital, leverage and liquidity regulations.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Thünen-Series of Applied Economic Theory - Working Paper ; No. 124

Classification and Topics

• Classification: Wirtschaft ; Computational Techniques; Simulation Modeling ; Financial Crises ; Portfolio Choice; Investment Decisions ; Banks; Depository Institutions; Micro Finance Institutions; Mortgages ; Financial Institutions and Services: Government Policy and Regulation
• Subject: financial stability ; systemic risk ; financial system ; banking regulation ; agent-based model ; Bankenaufsicht ; Basler Akkord ; Internationales Finanzsystem ; Agentenbasierte Modellierung ; Finanzkrise ; Systemrisiko ; Theorie ; Welt

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Neuberger, Doris ; Rissi, Roger
• Event: Veröffentlichung
• (who): Universität Rostock, Institut für Volkswirtschaftslehre
• (where): Rostock
• (when): 2012

Further information

• Handle: http://hdl.handle.net/10419/74654
• Last update: 10.03.2025, 11:44 AM CET