We study the interrelationship between the Basel III countercyclical capital buffer (CCyB) and the liquidity coverage ratio (LCR) requirement. We show that LCR comes with a risk-liquidity trade-off nonexistent in Basel II. Banks trade-off the advantage of a safe asset in terms of its weight...

Microfinance institutions (MFIs) are crucial in enhancing financial inclusion in developing countries. Nonetheless, one of their main challenges is their ability to be profitable while serving the poor and the excluded, especially during bad times. Accordingly, this study aims to determine...

The Basel III framework comes with the requirement of a minimum leverage ratio acting as a backstop to the existing Basel II risk-based capital ratio. Given that Canada and the US have adopted similar double capital rules prior to Basel III, we study the implications of these two rules on bank...

We take advantage of the long-standing regulation of the risk-based capital and the leverage ratio in Canada to provide empirical evidence on the relation between the credit unions' capital buffers and loans to members. Based on a unique sample of the 100 Canadian largest credit unions from 1996...

Some Canadian provinces have already adopted Basel III rules for the oversight of their administrated credit unions. We analyze the importance of the Basel III additional capital buffer requirements for credit union prudential regulation. Based on a sample of the 100 largest credit unions in...

New liquidity rules and capital buffers requirements are introduced by the Basel committee in its Basel III framework. As capital requirements play a key role in the supervision and regulation of banks, this paper investigates how the risk-sensitive LCR rule impacts the cyclical behavior of the...