Market Structure Capital Regulation And Bank Risk Taking
Download Market Structure Capital Regulation And Bank Risk Taking full books in PDF, epub, and Kindle. Read online free Market Structure Capital Regulation And Bank Risk Taking ebook anywhere anytime directly on your device. Fast Download speed and no annoying ads. We cannot guarantee that every ebooks is available!
Author | : Patrick Behr |
Publisher | : |
Total Pages | : |
Release | : 2008 |
Genre | : |
ISBN | : |
This paper discusses the effect of capital regulation on the risk taking behavior of commercial banks. We first theoretically show that capital regulation works differently in different market structures of banking sectors. In lowly concentrated markets, capital regulation is effective in mitigating risk taking behavior because banks' franchise values are low and banks have incentives to pursue risky strategies in order to increase their franchise values. If franchise values are high, on the other hand, the effect of capital regulation on bank risk taking is ambiguous as banks lack those incentives. We then test the model predictions on a cross-country sample including 421 commercial banks from 61 countries. We find that capital regulation is effective in mitigating risk taking only in markets with a low degree of concentration. The results remain robust after accounting for financial sector development, legal system effciency, and for other country and bank-specific characteristics. Keywords: Banks, market structure, risk shifting, franchise value, capital regulation
Author | : Nora Azureen Abdul Rahman |
Publisher | : |
Total Pages | : |
Release | : 2012 |
Genre | : |
ISBN | : |
Author | : Mr.Luc Laeven |
Publisher | : International Monetary Fund |
Total Pages | : 38 |
Release | : 2010-12-01 |
Genre | : Business & Economics |
ISBN | : 1455210838 |
We provide a theoretical foundation for the claim that prolonged periods of easy monetary conditions increase bank risk taking. The net effect of a monetary policy change on bank monitoring (an inverse measure of risk taking) depends on the balance of three forces: interest rate pass-through, risk shifting, and leverage. When banks can adjust their capital structures, a monetary easing leads to greater leverage and lower monitoring. However, if a bank's capital structure is fixed, the balance depends on the degree of bank capitalization: when facing a policy rate cut, well capitalized banks decrease monitoring, while highly levered banks increase it. Further, the balance of these effects depends on the structure and contestability of the banking industry, and is therefore likely to vary across countries and over time.
Author | : |
Publisher | : Lulu.com |
Total Pages | : 294 |
Release | : 2004 |
Genre | : Bank capital |
ISBN | : 9291316695 |
Author | : Mr.Luc Laeven |
Publisher | : International Monetary Fund |
Total Pages | : 34 |
Release | : 2014-05-08 |
Genre | : Business & Economics |
ISBN | : 1484363728 |
The proposed SDN documents the evolution of bank size and activities over the past 20 years. It discusses whether this evolution can be explained by economies of scale or “too big to fail” subsidies. The paper then presents evidence on the extent to which bank size and market-based activities contribute to systemic risk. The paper concludes with policy messages in the area of capital regulation and activity restrictions to reduce the systemic risk posed by large banks. The analysis of the paper complements earlier Fund work, including SDN 13/04 and the recent GFSR chapter on “too big to fail” subsidies, and its policy message is in line with this earlier work.
Author | : International Monetary Fund |
Publisher | : International Monetary Fund |
Total Pages | : 27 |
Release | : 2010-02-01 |
Genre | : Business & Economics |
ISBN | : 1451962908 |
We identify different sources of risk as important determinants of banks' corporate structures when expanding into new markets. Subsidiary-based corporate structures benefit from greater protection against economic risk because of affiliate-level limited liability, but are more exposed to the risk of capital expropriation than are branches. Thus, branch-based structures are preferred to subsidiary-based structures when expropriation risk is high relative to economic risk, and vice versa. Greater cross-country risk correlation and more accurate pricing of risk by investors reduce the differences between the two structures. Furthermore, the corporate structure affects bank risk taking and affiliate size.
Author | : Stéphanie Stolz |
Publisher | : |
Total Pages | : 44 |
Release | : 2002 |
Genre | : |
ISBN | : |
Author | : Paul S. Calem |
Publisher | : |
Total Pages | : 66 |
Release | : 1996 |
Genre | : Asset-liability management |
ISBN | : |
Author | : Lawrence D. Cluff |
Publisher | : DIANE Publishing |
Total Pages | : 187 |
Release | : 2000 |
Genre | : |
ISBN | : 0788186701 |
Author | : GARP (Global Association of Risk Professionals) |
Publisher | : John Wiley & Sons |
Total Pages | : 375 |
Release | : 2015-06-02 |
Genre | : Business & Economics |
ISBN | : 111909805X |
Gain a deeper understanding of the issues surrounding financial risk and regulation Foundations of Financial Risk details the various risks, regulations, and supervisory requirements institutions face in today's economic and regulatory environment. Written by the experts at the Global Association of Risk Professionals (GARP), this book represents an update to GARP's original publication, Foundations of Banking Risk. You'll learn the terminology and basic concepts surrounding global financial risk and regulation, and develop an understanding of the methods used to measure and manage market, credit, and operational risk. Coverage includes traded market risk and regulation, treasury risk and regulation, and much more, including brand new coverage of risk management for insurance companies. Clear explanations, focused discussion, and comprehensive relevancy make this book an ideal resource for an introduction to risk management. The textbook provides an understanding of risk management methodologies, governance structures for risk management in financial institutions and the regulatory requirements dictated by the Basel Committee on Banking Supervision. It provides thorough coverage of the issues surrounding financial risk, giving you a solid knowledgebase and a practical, applicable understanding. Understand risk measurement and management Learn how minimum capital requirements are regulated Explore all aspects of financial institution regulation and disclosure Master the terminology of global risk and regulation Financial institutions and supervisors around the world are increasingly recognizing how vital sound risk management practices are to both individual firms and the capital markets system as a whole. Savvy professionals recognize the need for authoritative and comprehensive training, and Foundations of Financial Risk delivers with expert-led education for those new to risk management.