IDEAS home Printed from https://ideas.repec.org/p/bis/bisbcw/30.html

Literature review on integration of regulatory capital and liquidity instruments

Author

Listed:
  • Bank for International Settlements

Abstract

This working paper aims at reviewing the literature's assessment of recent reforms. It consists of "three essays" on capital, on liquidity and its interaction with capital and on other supervisory requirements. Although there are many studies on the effects of capital requirements, there are relatively few on the effects of liquidity requirements and other supervisory tools. In part, this is because capital requirements have been in place for a considerable time and over more than one business cycle, while liquidity requirements and other supervisory tools, such as buffers, macroprudential policies and stress tests, have only been implemented since the recent financial crisis. The essay on capital reviews a large number of papers that assess the impact of higher capital requirements in terms of the costs and benefits to economic activity and welfare. The essay on liquidity and its interaction with capital identifies a number of potential channels through which liquidity requirements can affect bank behaviour, balance sheets and profitability. Finally, the essay on other supervisory requirements discusses (1) whether measures other than capital and liquidity requirements adequately complement these regulations in making the banking system more resilient; and (2) whether simpler regulatory rules may be more robust to extreme stress events than the ones in place and whether stress testing can enhance robustness.

Suggested Citation

  • Bank for International Settlements, 2016. "Literature review on integration of regulatory capital and liquidity instruments," BCBS Working Papers 30, Bank for International Settlements.
    • Handle: RePEc:bis:bisbcw:30
    as

    Download full text from publisher

    File URL: https://www.bis.org/bcbs/publ/wp30.pdf
    File Function: Full PDF document
    Download Restriction: no
    File URL: https://www.bis.org/bcbs/publ/wp30.htm
    Download Restriction: no
    ---><---

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bis:bisbcw:30. See general information about how to correct material in RePEc.

    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.

    We have no bibliographic references for this item. You can help adding them by using 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Martin Fessler (email available below). General contact details of provider: https://edirc.repec.org/data/bisssch.html .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.