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The New Basel Capital Accord (Basel II) from a Macroeconomic Point of View

  • Franz R. Hahn


The current capital accord ("Basel I") has been found inadequate in strengthening the stability of the international banking system. Its undifferentiated and inexact registration of credit risks and the breakneck pace of introducing innovative financial tools have greatly impaired its effectiveness. The new capital proposals prepared by the Basel Committee on Banking Supervision ("Basel II") provide, i.a., for improved methods of risk evaluation, which, however, may trigger undesirable effects at a macroeconomic level. Such effects may reach dimensions that could well endanger the aim of achieving a sustained strengthening of the international financial system.

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Article provided by WIFO in its journal Quarterly.

Volume (Year): 8 (2003)
Issue (Month): 2 (June)
Pages: 51-63

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Handle: RePEc:wfo:wquart:y:2003:i:2:p:51-63
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  1. Maximilian J.B. Hall, 2001. "The basle Committee's proposals for a new capital adequacy assessment framework: a critique," Banca Nazionale del Lavoro Quarterly Review, Banca Nazionale del Lavoro, vol. 54(217), pages 111-179.
  2. Frederic S. Mishkin, 2000. "Prudential Supervision: Why Is It Important and What are the Issues?," NBER Working Papers 7926, National Bureau of Economic Research, Inc.
  3. Franz R. Hahn, 2002. "The Effects of Bank Capital on Bank Credit Creation. Panel Evidence from Austria," WIFO Working Papers 188, WIFO.
  4. João A. C. Santos, 2000. "Bank capital regulation in contemporary banking theory: a review of the literature," BIS Working Papers 90, Bank for International Settlements.
  5. Misa Tanaka, 2002. "How Do Bank Capital and Capital Adequacy Regulation Affect the Monetary Transmission Mechanism?," CESifo Working Paper Series 799, CESifo Group Munich.
  6. Franz R. Hahn, . "Risk-taking and Solvency Regulation in Banking – A Comment," WIFO Working Papers 157, WIFO.
  7. Hancock, Diana & Wilcox, James A., 1998. "The "credit crunch" and the availability of credit to small business," Journal of Banking & Finance, Elsevier, vol. 22(6-8), pages 983-1014, August.
  8. Diana Hancock and James A. Wilcox., 1998. "The "Credit Crunch" and the Availability of Credit to Small Business," Research Program in Finance Working Papers RPF-282, University of California at Berkeley.
  9. Peek, Joe & Rosengren, Eric, 1995. "The Capital Crunch: Neither a Borrower nor a Lender Be," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 27(3), pages 625-38, August.
  10. Franz R. Hahn, . "Macroprudential Financial Regulation and Monetary Policy," WIFO Working Papers 154, WIFO.
  11. Shleifer, Andrei, 2000. "Inefficient Markets: An Introduction to Behavioral Finance," OUP Catalogue, Oxford University Press, number 9780198292272, July.
  12. Con Keating & Hyun Song Shin & Charles Goodhart & Jon Danielsson, 2001. "An Academic Response to Basel II," FMG Special Papers sp130, Financial Markets Group.
  13. Heinemann, Friedrich & Schüler, Martin, 2002. "A Stigler View on Banking Supervision," ZEW Discussion Papers 02-66, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
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