The authors use simulations within the BoC-GEM-FIN, the Bank of Canada’s version of the Global Economy Model with … changing bank regulations on the Canadian economy. Specifically, they compute short- and long-run impacts on key macroeconomic … that, while long-run effects on bank loans, lending spreads, investment, and output are modest, the short-run effects are …

explore the macroeconomic implications of various types of countercyclical bank capital regulations. Results suggest that … shocks. Moreover, the bank capital regulatory policy and monetary policy interact, and this interaction is contingent on the …. Compared to bank capital regulatory policy, monetary policy is able to stabilize the economy more efficiently after real shocks …

, economies whose banking sectors remain well-capitalized experience smaller reductions in bank lending and less pronounced … downturns. Bank capital thus increases an economy's ability to absorb shocks and, in doing so, affects the conduct of monetary … policy. The model is also used to shed light on the ongoing debate over bank capital regulation. …

relationship between banks and their depositors. As a result, bank capital and entrepreneurial net worth jointly determine … friction that banks face is reduced or eliminated. After documenting that the bank capital-asset ratio is countercyclical in …

One way of internalizing the externalities that each individual bank imposes on the rest of the financial system is to … information on interbank exposures. A relatively small bank playing an outsized role in the interbank market might be more … systemic, and thus garner a higher capital surcharge, than a less-connected bank of somewhat larger size. Alternatively, if the …

This paper assesses the merits of countercyclical bank balance sheet regulation for the stabilization of financial and … equilibrium model with banks and bank capital, in which bank capital solves an asymmetric information problem between banks and …, though banks do not internalize this impact. Regulation, in the form of a constraint on bank leverage, can mitigate the …