Noss, J. & Toffano, P. (2014) “Estimating the impact of changes in aggregate bank capital requirements during an upswing“, VoxEU Organisations, 06 Απριλίου.
The impact of tighter regulatory capital requirements during an economic upswing is a key question in macroprudential policy. This column discusses research suggesting that an increase of 15 basis points in aggregate capital ratios of banks operating in the UK is associated with a median reduction of around 1.4% in the level of lending after 16 quarters. The impact on quarterly GDP growth is statistically insignificant, a result that is consistent with firms substituting away from bank credit and towards that supplied via bond markets.
The recent financial crisis and economic contraction that followed highlighted the crucial role that banks play in facilitating the extension of credit and enabling economic growth. This underlies the economic rationale for imposing regulations on the banking industry, including minimum capital requirements designed to mitigate risks banks would not otherwise account for in their behaviour.
Σχετικές αναρτήσεις:
- Huertas, T. & Nieto, J. M. (2014) “How Much is Enough? The Case of the Resolution Fund in Europe“, Vox: Research-Based Policy Analysis & Commentary from Leading Economists, 18 Μαρτίου.
- Spellman, J. (2014) “EU Launches Long-Awaited Overhaul of Megabank Regulation“, The European Institute, EI Blog, Ιανουάριος.