Systemically Important Banks and Capital Regulation Challenges:

Bank regulation might have contributed to or even reinforced adverse systemic shocks that materialised during the financial crisis. Capital regulation based on risk-weighted assets encourages innovation designed to circumvent regulatory requirements and shifts banks' focus away from their core...

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1. Verfasser: Slovik, Patrick (VerfasserIn)
Format: Elektronisch E-Book
Sprache:English
Veröffentlicht: Paris OECD Publishing 2012
Schriftenreihe:OECD Economics Department Working Papers
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Zusammenfassung:Bank regulation might have contributed to or even reinforced adverse systemic shocks that materialised during the financial crisis. Capital regulation based on risk-weighted assets encourages innovation designed to circumvent regulatory requirements and shifts banks' focus away from their core economic functions. Tighter capital requirements based on risk-weighted assets may further contribute to these skewed incentives. The estimated macroeconomic costs of redirecting banks' attention away from such unconventional business practices are low. During a medium-term adjustment period, for each percentage point of bank equity, regulation that is not based on risk-weighted assets would affect annual GDP growth by -0.02 percentage point more than under the risk-weighted assets framework. Refocusing banks' attention toward their main economic functions is a core requirement for durable financial stability and sustainable economic growth
Beschreibung:1 Online-Ressource (17 Seiten) 21 x 29.7cm
DOI:10.1787/5kg0ps8cq8q6-en

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