We develop a macroeconomic model in which commercial banks can offload risky loans to a ‘shadow’ banking sector, and … financial intermediaries trade in securitised assets. We analyse the responses of aggregate activity, credit supply and credit … institutions affect credit dynamics; high leverage in the shadow banking system makes the economy excessively vulnerable to …

The regulation of bank capital to improve the resilience of the financial system and, related to this aim, as a means … of smoothing the credit cycle are central elements of forthcoming macroprudential regimes internationally. For such … regulation to be effective in controlling the aggregate supply of credit: (i) changes in capital requirements need to affect loan …

bank lending is surprisingly underexamined, given the central importance ascribed to this channel of contagion by … quarterly to the Bank of England. I find that the shock to foreign funding caused a substantial pullback in domestic lending …

UK bank panel data set from a period that pre-dates the recent financial crisis. Focusing on the behaviour of bank loans … lending to UK residents. Specifically, we use write-offs on loans to non-residents to instrument bank capital’s impact on UK …This paper assesses how shocks to bank capital may influence a bank’s portfolio behaviour using novel evidence from a …

We estimate the effect of changes in microprudential regulatory capital requirements on bank capital ratios and bank … lending. We do so by running panel regressions using a rich new data set, exploiting variation in individual bank capital … mostly recovers within three years. While estimated over a different policy regime and at the individual bank level, these …

the aggregate bank capital requirement during an economic upswing is associated with a reduction of lending, with the …

Traditionally, regulation of banks has focused on the riskentailed in bank loans. Loans are typically nontradedassets …. In recent years, another component of bank assetshas become increasingly important: assets actively tradedin the … financial markets.1 These assets form the “tradingbook” of a bank, in contrast to the “banking book,” whichincludes the …