IDEAS home Printed from https://ideas.repec.org/p/imf/imfwpa/2012-025.html
   My bibliography  Save this paper

Bank Capital Adequacy in Australia

Author

Listed:
  • Niamh Sheridan
  • Mr. B. Jang

Abstract

The paper finds that, given Australia's conservative approach in implementing the Basel II framework, Australian banks' headline capital ratios underestimate their capital strengths. Given their high capital quality and the progress in their funding profiles since the global financial crisis, the Australian banks are making good progress toward meeting the Basel III requirements, including the new liquidity standards. Stress tests calibrated on the Irish crisis experience show that the banks could withstand sizable shocks to their exposure to residential mortgages. However, combining residential mortgage shocks with corporate losses expected at the peak of the global financial crisis would put more pressure on Australian banks' capital. Therefore, it would be useful to consider the merits of higher capital requirements for systemically important domestic banks.

Suggested Citation

  • Niamh Sheridan & Mr. B. Jang, 2012. "Bank Capital Adequacy in Australia," IMF Working Papers 2012/025, International Monetary Fund.
  • Handle: RePEc:imf:imfwpa:2012/025
    as

    Download full text from publisher

    File URL: http://www.imf.org/external/pubs/cat/longres.aspx?sk=25667
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Pierluigi Bologna, 2010. "Australian Banking System Resilience: What Should Be Expected Looking Forward? An International Perspective," IMF Working Papers 2010/228, International Monetary Fund.
    2. Elöd Takáts & Ms. Patrizia Tumbarello, 2009. "Australian Bank and Corporate Sector Vulnerabilities: An International Perspective," IMF Working Papers 2009/223, International Monetary Fund.
    3. International Monetary Fund, 2010. "Australia: Basel II Implementation Assessment," IMF Staff Country Reports 2010/107, International Monetary Fund.
    4. International Monetary Fund, 2010. "Canada: Selected Issues Paper," IMF Staff Country Reports 2010/378, International Monetary Fund.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Muijsson, Cherry & Satchell, Stephen, 2020. "The role of bank funding in systematic risk transmission," Finance Research Letters, Elsevier, vol. 33(C).
    2. J. Alejandro Fernández Fernández, 2019. "The Banking System in Australia and New Zealand: A Vision together," Journal of Applied Finance & Banking, SCIENPRESS Ltd, vol. 9(2), pages 1-1.
    3. Mr. B. Jang & Mr. Masahiko Kataoka, 2013. "New Zealand Banks’ Vulnerabilities and Capital Adequacy," IMF Working Papers 2013/007, International Monetary Fund.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. repec:onb:oenbwp:y:2011:i:22:b:1 is not listed on IDEAS
    2. Pierluigi Bologna, 2010. "Australian Banking System Resilience: What Should Be Expected Looking Forward? An International Perspective," IMF Working Papers 2010/228, International Monetary Fund.
    3. Benjamin Neudorfer & Michael Sigmund & Alexander Trachta, 2011. "Detecting Financial Stability Vulnerabilities in Due Time: Can Simple Indicators Identify a Complex Issue?," Financial Stability Report, Oesterreichische Nationalbank (Austrian Central Bank), issue 22, pages 59-71.
    4. Pierluigi Bologna, 2015. "Structural Funding and Bank Failures," Journal of Financial Services Research, Springer;Western Finance Association, vol. 47(1), pages 81-113, February.
    5. Mr. B. Jang & Mr. Masahiko Kataoka, 2013. "New Zealand Banks’ Vulnerabilities and Capital Adequacy," IMF Working Papers 2013/007, International Monetary Fund.
    6. Ms. Yan M Sun, 2010. "Potential Growth of Australia and New Zealand in the Aftermath of the Global Crisis," IMF Working Papers 2010/127, International Monetary Fund.
    7. Sheilla Nyasha & Nicholas M. Odhiambo, 2016. "Financial Systems and Economic Growth: Empirical Evidence from Australia," Contemporary Economics, University of Economics and Human Sciences in Warsaw., vol. 10(2), June.
    8. Pierluigi Bologna, 2011. "Is there a role for funding in explaining recent US bank failures?," Questioni di Economia e Finanza (Occasional Papers) 103, Bank of Italy, Economic Research and International Relations Area.

    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:imf:imfwpa:2012/025. 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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc 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 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: Akshay Modi (email available below). General contact details of provider: https://edirc.repec.org/data/imfffus.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.