Bank capital requirements: Risk weights you cannot trust and the implications for Basel III

Jens Hagendorff, Francesco Vallascas, 16 December 2013

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One of the primary purposes of bank capital is to absorb losses. Where bank capital holdings are insufficient to absorb losses, banks will either fail or – if bank failure is deemed too costly for the economy – be bailed out. In practice, banks frequently receive public funds where capital holdings are insufficient to cover losses in order to prevent bank failure.

Topics: Financial markets, Microeconomic regulation
Tags: bank capital, Basel, Basel II, BASEL III, capital adequacy, capital requirements, financial crisis, risk weighting

New challenges for bank competition policy

Lev Ratnovski, 2 June 2013

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Bank competition policy has been a focus of much research and policy debate. The reason for this is the special nature of banks. In the non-financial sector, competition policy mainly focuses on efficiency (competitive pricing). Yet for banks there is another relevant dimension: systemic risk.

Topics: Competition policy, Global crisis, International finance
Tags: banking, banks, Basel, Competition policy

Implementation of Basel III in the US will bring back the regulatory arbitrage problems under Basel I

Takeo Hoshi, 23 December 2012

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This column is a lead commentary in the VoxEU Debate "Banking reform: Do we know what has to be done?"

Topics: International finance
Tags: banks, Basel, Dodd-Frank, Finance, regulation

Systemic liquidity risk: A European approach

Enrico Perotti, 25 October 2011

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The repeated bursts of financial distress in Europe in 2010-11 reflect vulnerabilities built up in the previous decade and are germane to the roots of the credit crisis.

Topics: Financial markets, International finance
Tags: Basel, hot money, liquidity risk

The Empire strikes back

Avinash Persaud, 14 September 2010

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There are two remarkable aspects of the consensus around international financial regulation emerging in the run up to the November G20 meeting in Seoul. The first is that there is a consensus.

Topics: Global crisis, International finance
Tags: banking, Basel, financial regulation, global crisis

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