Banking regulation invites banks to gamble when buying government bonds that regulators consider to be risk-free. The … regulation in order to enhance their fiscal leeway. We examine an unintended side-effect of banking regulation, namely the zero … area periphery countries to a restrictive macroprudential capital regulation shock. We find that, unlike in the US, euro …

This paper investigates the impact of banking prudential regulation on sovereign risk. We show that prudential … regulation reduces sovereign risk and induces governments to spend more. As a result, countries with tight prudential regulation … have lower primary budget balances and accumulate more government debt over time. We find that prudential regulation …

regulation on the probability of a crisis. We test this relationship by applying a Probit model of a non-linear specification to …: it rises as regulation stringency moves from low to medium levels and falls from medium to high levels. Countries located …

The paper empirically examines the implementation record of international financial regulation of the banking sector … record is particularly strong in countries where large banking sectors and big banks are both present, and where regulation …

This paper seeks to understand the interplay between banks, bank regulation, sovereign default risk and central bank … in other "safe" countries will impose tighter regulation. As a result, governments in risky countries get to borrow more …