Arbeitspapier
Macroprudential policy with capital buffers
This paper studies optimal bank capital requirements in a model of endogenous bank funding conditions. I find that requirements should be higher during good times such that a macroprudential "buffer" is provided. However, whether banks can use buffers to maintain lending during a financial crisis depends on the capital requirement during the subsequent recovery. The reason is that a high requirement during the recovery lowers bank shareholder value during the crisis and thus creates funding-market pressure to use buffers for deleveraging rather than for maintaining lending. Therefore, buffers are useful if banks are not required to rebuild them quickly.
- Sprache
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Englisch
- Erschienen in
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Series: Bank of Canada Staff Working Paper ; No. 2019-8
- Klassifikation
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Wirtschaft
General Aggregative Models: Neoclassical
Business Fluctuations; Cycles
Financial Markets and the Macroeconomy
- Thema
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Credit and credit aggregates
Financial stability
Financial system regulation and policies
Business fluctuations and cycles
Credit risk management
Lender of last resort
- Ereignis
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Geistige Schöpfung
- (wer)
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Schroth, Josef
- Ereignis
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Veröffentlichung
- (wer)
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Bank of Canada
- (wo)
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Ottawa
- (wann)
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2019
- DOI
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doi:10.34989/swp-2019-8
- Handle
- Letzte Aktualisierung
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20.09.2024, 08:22 MESZ
Datenpartner
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Objekttyp
- Arbeitspapier
Beteiligte
- Schroth, Josef
- Bank of Canada
Entstanden
- 2019