This file is part of IDEAS , which uses RePEc data
[ Papers |
Articles |
Software |
Books |
Chapters |
Authors |
Institutions |
JEL Classification |
NEP reports |
Search |
New papers by email |
Author registration |
Rankings |
Volunteers |
FAQ |
Blog |
Help! ]
Bank Size and Risk-Taking under Basel II Author info | Abstract | Publisher info | Download info | Related research | Statistics Hakenes, Hendrik () (Sonderforschungsbereich 504)
Schnabel, Isabel () (Sonderforschungsbereich 504)
Additional information is available for the following
registered author(s):
This paper discusses the relationship between bank size and risk-taking under Pillar I of the New Basel Capital Accord. Using a model with imperfect competition and moral hazard, we find that small banks (and hence small borrowers) may profit from the introduction of an internal ratings based (IRB) approach if this approach is applied uniformly across banks. However, the banks' right to choose between the standardized and the IRB approaches unambiguously hurts small banks who are pushed towards higher risk-taking due to fiercer competition. This may even lead to higher aggregate risk in the economy.
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
page . Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
Paper provided by Sonderforschungsbereich 504, Universität Mannheim & Sonderforschungsbereich 504, University of Mannheim in its series Sonderforschungsbereich 504 Publications with number
05-07.
Download reference. The following formats are available: HTML
(with abstract ),
plain text
(with abstract ),
BibTeX ,
RIS (EndNote, RefMan, ProCite),
ReDIF
Length: 32 pages
Date of creation: 14 Feb 2005Date of revision:
Handle: RePEc:xrs:sfbmaa:05-07Note: We would like to thank Anne van Aaken, Felix Höffler, and especially Martin Hellwig for helpful comments. We also thank the participants of the XIII International ``Tor VergataContact details of provider: Postal: D-68131 Mannheim Phone: (49) (0) 621-292-2547 Fax: (49) (0) 621-292-5594 Email: Web page: http://www.sfb504.uni-mannheim.de/ More information through EDIRC
Web page: http://www.sfb504.uni-mannheim.de
Order Information: Email:
For technical questions regarding this item, or to correct its listing, contact: (Carsten Schmidt).
Keywords: Other versions of this item:
Paper Hendrik Hakenes & Isabel Schnabel, 2006.
"Bank Size and Risk-Taking under Basel II ,"
Discussion Papers
88, SFB/TR 15 Governance and the Efficiency of Economic Systems, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
[Downloadable!] References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile , click on "citations" and make appropriate adjustments.: Hendrik Hakenes & Isabel Schnabel, 2004.
"Banks without Parachutes - Competitive Effects of Government Bail-out Policies ,"
Discussion Papers
8, SFB/TR 15 Governance and the Efficiency of Economic Systems, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
[Downloadable!]
Other versions:
Hakenes, Hendrik & Schnabel, Isabel, 2004.
"Banks without Parachutes -- Competitive Effects of Government Bail-out Policies ,"
Sonderforschungsbereich 504 Publications
04-53, Sonderforschungsbereich 504, Universität Mannheim & Sonderforschungsbereich 504, University of Mannheim.
[Downloadable!] Hendrik Hakenes & Isabel Schnabel, 2004.
"Banks without Parachutes – Competitive Effects of Government Bail-out Policies ,"
Working Paper Series of the Max Planck Institute for Research on Collective Goods
2004_12, Max Planck Institute for Research on Collective Goods.
[Downloadable!] Timothy H. Hannan & Steven J. Pilloff, 2004.
"Will the proposed application of Basel II in the United States encourage increased bank merger activity? evidence from past merger activity ,"
Finance and Economics Discussion Series
2004-13, Board of Governors of the Federal Reserve System (U.S.).
[Downloadable!]
Morrison, Alan & White, Lucy, 2004.
"Crises and Capital Requirements in Banking ,"
CEPR Discussion Papers
4364, C.E.P.R. Discussion Papers.
[Downloadable!] (restricted)
Other versions: repec:fth:bfdipa:15/2001 is not listed on IDEAS
Myers, Stewart C. & Majluf, Nicolás S., 1945-, 1984.
"Corporate financing and investment decisions when firms have information that investors do not have ,"
Working papers
1523-84., Massachusetts Institute of Technology (MIT), Sloan School of Management.
[Downloadable!]
Danielsson, Jon & Shin, Hyun Song & Zigrand, Jean-Pierre, 2004.
"The impact of risk regulation on price dynamics ,"
Journal of Banking & Finance ,
Elsevier, vol. 28(5), pages 1069-1087, May.
[Downloadable!] (restricted)
Con Keating & Hyun Song Shin & Charles Goodhart & Jon Danielsson, 2001.
"An Academic Response to Basel II ,"
FMG Special Papers
sp130, Financial Markets Group.
[Downloadable!] (restricted)
Rock, Kevin, 1986.
"Why new issues are underpriced ,"
Journal of Financial Economics ,
Elsevier, vol. 15(1-2), pages 187-212.
[Downloadable!] (restricted)
Stewart C. Myers & Nicholas S. Majluf, 1984.
"Corporate Financing and Investment Decisions When Firms Have InformationThat Investors Do Not Have ,"
NBER Working Papers
1396, National Bureau of Economic Research, Inc.
[Downloadable!] (restricted)
Steven C. Salop, 1979.
"Monopolistic Competition with Outside Goods ,"
Bell Journal of Economics ,
The RAND Corporation, vol. 10(1), pages 141-156, Spring.
[Downloadable!] (restricted)
Myers, Stewart C. & Majluf, Nicholas S., 1984.
"Corporate financing and investment decisions when firms have information that investors do not have ,"
Journal of Financial Economics ,
Elsevier, vol. 13(2), pages 187-221, June.
[Downloadable!] (restricted)
Allen N. Berger & Nathan H. Miller & Mitchell A. Petersen & Raghuram G. Rajan & Jeremy C. Stein, 2002.
"Does Function Follow Organizational Form? Evidence From the Lending Practices of Large and Small Banks ,"
NBER Working Papers
8752, National Bureau of Economic Research, Inc.
[Downloadable!] (restricted)
Other versions:
Allen N. Berger & Nathan H. Miller & Mitchell A. Petersen & Raghuram G. Rajan & Jeremy C. Stein, 2002.
"Does Function Follow Organzizational Form? Evidence From the Lending Practices of Large and Small Banks ,"
Harvard Institute of Economic Research Working Papers
1976, Harvard - Institute of Economic Research.
[Downloadable!] Allen N. Berger & Nathan H. Miller & Mitchell A. Petersen & Raghuran G. Rajan & Jeremy C. Stein, 2002.
"Does function follow organizational form? evidence from the lending practices of large and small banks ,"
Proceedings ,
Federal Reserve Bank of Chicago, issue May, pages 383-400.
Berger, Allen N. & Miller, Nathan H. & Petersen, Mitchell A. & Rajan, Raghuram G. & Stein, Jeremy C., 2005.
"Does function follow organizational form? Evidence from the lending practices of large and small banks ,"
Journal of Financial Economics ,
Elsevier, vol. 76(2), pages 237-269, May.
[Downloadable!] (restricted) Rebel A. Cole & Lawrence G. Goldberg & Lawrence J. White, 1997.
"Cookie-Cutter versus Character: The Micro Structure of Small Business Lending by Large and Small Banks ,"
New York University, Leonard N. Stern School Finance Department Working Paper Seires
98-022, New York University, Leonard N. Stern School of Business-.
Other versions: Repullo, Rafael & Suarez, Javier, 2004.
"Loan pricing under Basel capital requirements ,"
Journal of Financial Intermediation ,
Elsevier, vol. 13(4), pages 496-521, October.
[Downloadable!] (restricted)
Other versions: Decamps, Jean-Paul & Rochet, Jean-Charles & Roger, Benoit, 2004.
"The three pillars of Basel II: optimizing the mix ,"
Journal of Financial Intermediation ,
Elsevier, vol. 13(2), pages 132-155, April.
[Downloadable!] (restricted)
Other versions: Allen N. Berger, 2004.
"Potential competitive effects of Basel II on banks in SME credit markets in the United States ,"
Finance and Economics Discussion Series
2004-12, Board of Governors of the Federal Reserve System (U.S.).
[Downloadable!]
Other versions: John H. Boyd & Gianni De Nicolã, 2005.
"The Theory of Bank Risk Taking and Competition Revisited ,"
Journal of Finance ,
American Finance Association, vol. 60(3), pages 1329-1343, 06.
[Downloadable!] (restricted)
Viral V. Acharya, 2003.
"Is the International Convergence of Capital Adequacy Regulation Desirable? ,"
Journal of Finance ,
American Finance Association, vol. 58(6), pages 2745-2782, December.
[Downloadable!] (restricted)
Other versions: Stiglitz, Joseph E & Weiss, Andrew, 1981.
"Credit Rationing in Markets with Imperfect Information ,"
American Economic Review ,
American Economic Association, vol. 71(3), pages 393-410, June.
[Downloadable!] (restricted)
Anil Kashyap & Jeremy C. Stein, 2004.
"Cyclical implications of the Basel II capital standards ,"
Economic Perspectives ,
Federal Reserve Bank of Chicago, issue Q I, pages 18-31.
[Downloadable!]
Thomas F. Hellmann & Kevin C. Murdock & Joseph E. Stiglitz, 2000.
"Liberalization, Moral Hazard in Banking, and Prudential Regulation: Are Capital Requirements Enough? ,"
American Economic Review ,
American Economic Association, vol. 90(1), pages 147-165, March.
[Downloadable!] (restricted)
Rochet, Jean-Charles, 1992.
"Capital requirements and the behaviour of commercial banks ,"
European Economic Review ,
Elsevier, vol. 36(5), pages 1137-1170, June.
[Downloadable!] (restricted)
George W. Haynes & Charles Ou & Robert Berney, 1999.
"Small business borrowing from large and small banks ,"
Proceedings ,
Federal Reserve Bank of Chicago, issue Mar, pages 287-327.
[Downloadable!]
Repullo, Rafael, 2004.
"Capital requirements, market power, and risk-taking in banking ,"
Journal of Financial Intermediation ,
Elsevier, vol. 13(2), pages 156-182, April.
[Downloadable!] (restricted)
Other versions:
Repullo, Rafael, 2003.
"Capital Requirements, Market Power and Risk-Taking in Banking ,"
CEPR Discussion Papers
3721, C.E.P.R. Discussion Papers.
[Downloadable!] (restricted) Rafael Repullo, 2002.
"Capital requirements, market power, and risk-taking in banking ,"
Proceedings ,
Federal Reserve Bank of Chicago, issue May, pages 150-163.
Full
references Cited by : (explanations , Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile , click on "citations" and make appropriate adjustments.)
Inês Drumond, 2008.
"Bank Capital Requirements, Business Cycle Fluctuations and the Basel Accords: A Synthesis ,"
FEP Working Papers
277, Universidade do Porto, Faculdade de Economia do Porto.
[Downloadable!]
Hendrik Hakenes & Isabel Schnabel, 2006.
"The Threat of Capital Drain: A Rationale for Public Banks? ,"
Working Paper Series of the Max Planck Institute for Research on Collective Goods
2006_11, Max Planck Institute for Research on Collective Goods.
[Downloadable!]
Other versions: Hege, Ulrich & Feess, Eberhard, 2007.
"Basel II and the Value of Bank Differentiation ,"
Les Cahiers de Recherche
879, HEC Paris.
[Downloadable!]
Access and
download statistics Did you know? IDEAS was sponsored from 1997 to 2002 by the Université du Québec à Montréal .
This page was last updated on 2009-11-16.
This information is provided to you by IDEAS at the Department of Economics , College of Liberal Arts and Sciences , University of Connecticut using RePEc data on a server sponsored by the Society for Economic Dynamics .