Macroprudential policy with capital buffers / by Josef Schroth.: FB3-5/2019-8E-PDF
"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"--Abstract.
Permanent link to this Catalogue record:
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| Department/Agency | Bank of Canada. |
|---|---|
| Title | Macroprudential policy with capital buffers / by Josef Schroth. |
| Series title | Bank of Canada staff working paper, 1701-9397 ;2019-8 |
| Publication type | Series - View Master Record |
| Language | [English] |
| Format | Electronic |
| Electronic document | |
| Note(s) | Includes bibliographic references. Includes abstract in French. |
| Publishing information | Ottawa : Bank of Canada, February 2019. ©2019 |
| Author / Contributor | Schroth, Josef, author. |
| Description | 1 online resource (iii, 45 pages) : figures. |
| Catalogue number |
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| Subject terms | Financial management Economic regulations |
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