IDEAS home Printed from
MyIDEAS: Login to save this article or follow this journal

Pro-cyclicality of the Basel Capital Requirement Ratio and Its Impact on Banks-super-∗

  • Naoyuki Yoshino

    (Department of Economics Keio University Mita 2-15-45 Minato-ku Tokyo, Japan 108-8345 and Director of Financial Research Center (FSA Institute) Financial Services Agency (FSA) The Japanese Government)

  • Tomohiro Hirano

    (Financial Research Center (FSA Institute) Financial Services Agency (FSA) The Japanese Government 3-2-1 Kasumigaseki Chiyoda-ku Tokyo, Japan 100-8967 Central common government offices No. 7)

Registered author(s):

    This paper proposes replacing the present Basel capital requirement with a new counter-cyclical measure. Optimally, (i) the Basel capital requirement ratio should depend on various economic factors such as the cyclical stage of GDP, credit growth, stock prices, interest rates, and land prices—hence, avoiding the expansion of bank loans during a boom period and a credit crunch during a sluggish period; (ii) the Basel minimum capital requirement rule should be different from country to country since the economic structures and the behavior of banks are different; and (iii) cross-border bank operation should follow the minimum capital requirement ratio where bank lending activities occur rather than the origin of the source of funds. © 2011 The Earth Institute at Columbia University and the Massachusetts Institute of Technology.

    If you experience problems downloading a file, check if you have the proper application to view it first. 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.

    File URL:
    File Function: link to full text
    Download Restriction: Access to full text is restricted to subscribers.

    As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

    Article provided by MIT Press in its journal Asian Economic Papers.

    Volume (Year): 10 (2011)
    Issue (Month): 2 (June)
    Pages: 22-36

    in new window

    Handle: RePEc:tpr:asiaec:v:10:y:2011:i:2:p:22-36
    Contact details of provider: Web page:

    Order Information: Web:

    No references listed on IDEAS
    You can help add them by filling out this form.

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    When requesting a correction, please mention this item's handle: RePEc:tpr:asiaec:v:10:y:2011:i:2:p:22-36. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Anna Pollock-Nelson)

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.