Supranational Rules, National Discretion: Increasing Versus Inflating Regulatory Bank Capital?
Öffnen
Datum
2021-02-16
Autor
Gropp, Reint
Mosk, Thomas
Ongena, Steven
Simac, Ines
Wix, Carlo
SAFE No.
296
Metadata
Zur Langanzeige
Zusammenfassung
We study how higher capital requirements introduced at the supranational and implemented at the national level affect the regulatory capital of banks across countries. Using the 2011 EBA capital exercise as a quasi-natural experiment, we find that affected banks inflate their levels of regulatory capital without a commensurate increase in their book equity and without a reduction in bank risk. This observed regulatory capital inflation is more pronounced in countries where credit supply is expected to tighten. Our results suggest that national authorities forbear their domestic banks to meet supranational requirements, with a focus on short-term economic considerations.
Forschungsbereich
Financial Intermediation
Thema
Fiscal Stability
Corporate Governance
Stability and Regulation
Corporate Governance
Stability and Regulation
Beziehungen
1
Publikationstyp
Working Paper
Link zur Publikation
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- LIF-SAFE Working Papers [334]