Competitive effects of Basel II on US bank credit card lending
AbstractWe analyze the potential competitive effects of the proposed Basel II capital regulations on US bank credit card lending. We find that bank issuers operating under Basel II will face higher regulatory capital minimums than Basel I banks, with differences due to the way the two regulations treat reserves and gain-on-sale of securitized assets. During periods of normal economic conditions, this is not likely to have a competitive effect; however, during periods of substantial stress in credit card portfolios, Basel II banks could face a significant competitive disadvantage relative to Basel I banks and nonbank issuers.
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of Financial Intermediation.
Volume (Year): 17 (2008)
Issue (Month): 4 (October)
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Web page: http://www.elsevier.com/locate/inca/622875
Basel Accord Basel II Capital requirements Bank regulation Competition;
Other versions of this item:
- William W. Lang & Loretta J. Mester & Todd A. Vermilyea, 2007. "Competitive effects of Basel II on U.S. bank credit card lending," Working Papers 07-9, Federal Reserve Bank of Philadelphia.
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