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Kiema, Ilkka; Jokivuolle, Esa - Suomen Pankki - 2013

The aim of the Internal Ratings Based Approach (IRBA) of Basel II was that capital suffices for unexpected losses with at least a 99.9% probability. However, because only a fraction of the required regulatory capital (a quarter to a half) had to be loss absorbing capital, the actual solvency...

Persistent link: https://www.econbiz.de/10010699286

Leverage ratio requirement, credit allocation and bank stability

Kiema, Ilkka; Jokivuolle, Esa - Suomen Pankki - 2011

We study the effects on credit allocation and bank stability of introducing a leverage ratio requirement (LRR) on top of risk-based capital requirements, as in Basel III. For the current 3% LRR, both low-risk and high-risk loan rates and volumes remain essentially unchanged, because banks...

Persistent link: https://www.econbiz.de/10009003108

Banking after regulatory reforms - business as usual? : a joint publication with the Bank of Finland

Jokivuolle, Esa (ed., introduction); … - SUERF/Bank of Finland Conference Banking after …; … - 2014

The 5th joint SUERF/Bank of Finland joint conference was held in Helsinki on 13 June 2013. The general theme of the conference was to focus on the regulatory reforms after the global financial crisis and, in particular, how structural reforms of banking ("Volcker, Vickers and Liikanen") could...

Persistent link: https://www.econbiz.de/10011711934

The Microeconomics of Innovation: Oligopoly Theoretic Analyses with Applications to Banking and Patenting

Kauko, Karlo - Suomen Pankki - 2000

The innovation activities of companies has long been a topic of interest in economics. Game theory models of oligopoly … have since the start of the 1980s played a central role in the economics of innovation. In this study three game theory … model is used to study patenting decisions by a company that has made an innovation. A company can monopolize its innovation …

Persistent link: https://www.econbiz.de/10008774218

Sovereign risk, European crisis resolution policies and bond yields

Kilponen, Juha; Laakkonen, Helinä; Vilmunen, Jouko - Suomen Pankki - 2012

We study the effects of the ECB monetary policy and the European crisis resolution policies on the 10 year sovereign bond yields of seven European countries. We find that some of the decisions have had significant impact on sovereign bond yields and have succeeded in reducing stress in the...

Persistent link: https://www.econbiz.de/10011191539

Ending over-lending: Assessing systemic risk with debt to cash flow

Ramsay, Bruce A.; Sarlin, Peter - Suomen Pankki - 2014

This paper operationalizes early theoretical contributions of Hyman Minsky and applies these in the context of economic sectors and nations. Following the view of boom-bust asset cycles, depicted by the endogenous build-up of risks and their abrupt unraveling, Minsky highlighted the relationship...

Persistent link: https://www.econbiz.de/10010819000

The effect of a transaction tax on exchange rate volatility

Lanne, Markku; Vesala, Timo - Suomen Pankki - 2006

We argue that a transaction tax is likely to amplify, not dampen, volatility in the foreign exchange mar-kets. Our argument stems from the decentralised trading practice and the presumable discrepancy be-tween ‘informed’ and ‘uninformed’ traders’ valuations. Since informed traders’...

Persistent link: https://www.econbiz.de/10005423683

Regulatory choices in global financial markets – restoring the role of aggregate utility in the shaping of market supervision

Granlund, Peik - Suomen Pankki - 2008

In financial market studies, public supervision has rarely been found to have any effects on financial market development. This is true, even though the primary objective of supervisory legislation is the limitation of market failures and externalities. Studies conducted by eg the World Bank and...

Persistent link: https://www.econbiz.de/10005423726

What drives loan losses in Europe?

Jokivuolle, Esa; Pesola, Jarmo; Viren, Matti - Suomen Pankki - 2013

We model banks’ loan losses with a panel of European countries for the period 1982–2012 using three country-specific macro variables: output growth shocks, real interest rates, and a measure of excessive private sector indebtedness. We find that a drop in output has an intensified impact on...

Persistent link: https://www.econbiz.de/10011207863

Measuring financial stress – A country specific stress index for Finland

Huotari, Jarkko - Suomen Pankki - 2015

I propose a financial stress index (FSI) for the Finnish financial system that aims to reflect the functionality of the financial system and provide an aggregate measure of financial stress in the money, bond, equity and foreign exchange markets and the banking sector. The FSI is a composite...

Persistent link: https://www.econbiz.de/10011210509