The impact of Basel I capital requirements on bank behavior and the efficacy of monetary policy
The paper attempts to investigate the influence of the 1988 Basel Accord on bank behavior and monetary policy. It is argued that the Accord was successful in that it forced commercial banks in all of G-10 countries to maintain higher capital ratios. Tentative research suggests, however, that – at least among American banks – the Accord also encouraged the widespread resort to regulatory capital arbitrage techniques, in particular securitization. The paper also reviews the literature on the transmission mechanism of monetary policy and shows that the Basel Accord has affected the bank lending channel
Volume (Year): 2 (2009)
Issue (Month): 1 (June)
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References listed on IDEAS
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- Samu Peura & Esa Jokivuolle, 2004. "Simulation-based stress testing of banks’ regulatory capital adequacy," Finance 0405003, EconWPA.
- Gabe J. De Bondt & Henriette M. Prast, 2000.
"Bank capital ratios in the 1990s: cross-country evidence,"
BNL Quarterly Review,
Banca Nazionale del Lavoro, vol. 53(212), pages 71-97.
- Gabe J. De Bondt & Henriette M. Prast, 2000. "Bank capital ratios in the 1990s: cross-country evidence," Banca Nazionale del Lavoro Quarterly Review, Banca Nazionale del Lavoro, vol. 53(212), pages 71-97.
- G.J. de Bondt & H.M. Prast, 1999. "Bank capital ratios in the 1990s: cross-country evidence," WO Research Memoranda (discontinued) 603, Netherlands Central Bank, Research Department.
- Bofinger, Peter, 2001. "Monetary Policy: Goals, Institutions, Strategies, and Instruments," OUP Catalogue, Oxford University Press, number 9780199248568. Full references (including those not matched with items on IDEAS)