00000nam 2200000zi 4500 9.927890 CaOODSP 20230928125557 m o d f cr cn||||||||| 230928t20232023oncd ob f000 0 eng d CaOODSP eng rda CaOODSP eng eng fre FB3-5/2023-49E-PDF Schroth, Josef, author. Should banks be worried about dividend restrictions? / by Josef Schroth. [Ottawa] : Bank of Canada = Banque du Canada, 2023. ©2023 1 online resource (24 pages) : graphs. text txt rdacontent computer c rdamedia online resource cr rdacarrier Staff working paper = Document de travail du personnel, 1701-9397 ; 2023-49 "September 27, 2023." Cover title. Includes bibliographical references (pages 21-23). "In the model in this paper, banks are rationally forward-looking and thus ignore short-lived reductions in capital requirements. During a financial crisis, a regulator would want to first impose drastic dividend restrictions to force banks to rebuild capital, but also would want to keep capital requirements low for a sufficiently long time afterwards. However, such a policy is not time-consistent. Once banks are sufficiently re-capitalized, the regulator would be tempted to immediately raise capital requirements all the way to pre-crisis levels. Optimal time-consistent capital regulation requires that bank capital is rebuilt gradually during financial crises. In particular, banks must be able to pay dividends even when bank equity is still significantly below pre-crisis levels"--Abstract, page 2. Includes abstracts in English and French. Dividend reinvestment. Business cycles Econometric models. Financial risk management. Dividendes Réinvestissement. Cycles économiques Modèles économétriques. Finances Gestion du risque. Bank of Canada, issuing body. Staff working paper (Bank of Canada) 1701-9397 ; 2023-49. (CaOODSP)9.806221 PDF 405 KB https://publications.gc.ca/collections/collection_2023/banque-bank-canada/FB3-5-2023-49-eng.pdf