Optimal capital regulation / by Stéphane Moyen and Josef Schroth.: FB3-5/2017-6E-PDF
“We study constrained-efficient bank capital regulation in a model with market-imposed equity requirements. Banks hold equity buffers to insure against sudden loss of access to funding. However, in the model, banks choose to only partially self-insure because equity is privately costly. As a result, equity requirements are occasionally binding. Constrained-efficient regulation requires banks to build up additional equity buffers and compensates them for the cost of equity with a permanent increase in lending margins. When buffers are depleted, regulation relaxes the market-imposed equity requirements by raising bank future prospects through temporarily elevated lending margins"--Abstract, p. ii.
Permanent link to this Catalogue record:
publications.gc.ca/pub?id=9.833268&sl=0
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| Title | Optimal capital regulation / by Stéphane Moyen and Josef Schroth. |
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| Publication type | Monograph - View Master Record |
| Language | [English] |
| Format | Digital text |
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| Description | ii, 38 p. : charts |
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