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paper shows that financial regulation can be effective at mitigating this type of risk. Exploiting regulatory changes … financial institutions subject to stricter regulation. Following the easing of these regulations, overconfidence-induced risk …-taking increases again. These findings confirm the effectiveness of financial regulation at correcting overconfident behavior, but also …
Persistent link: https://www.econbiz.de/10014477386
Several countries have recently introduced national capital standards exceeding the internationally coordinated Basel III rules, which is inconsistent with the 'race to the bottom' in capital standards found in the literature. We study regulatory competition when banks are heterogeneous and give...
Persistent link: https://www.econbiz.de/10011591503
This paper builds a macro model with a financial sector and a housing market to understand the transmission and effects of macroprudential instruments addressing mortgage credit. The model compares the introduction of a loan-to-value ratio (LTV), a countercyclical capital buffer (CCyB)-style...
Persistent link: https://www.econbiz.de/10012034723
This paper deals with both system-wide and banks' internal stress tests. For system-wide stress tests it describes the evolution over time, compares the stress test design in major jurisdictions, and discusses academic research. System-wide stress tests have gained in importance and nowadays...
Persistent link: https://www.econbiz.de/10012534563
potential endogeneity which are usually inherent to research into the real economic implications of bank regulation. We find a …
Persistent link: https://www.econbiz.de/10009751064
In Europe, the financial stability mandate generally rests at the national level. But there is an important exception. Since the establishment of the Banking Union in 2014, the European Central Bank (ECB) can impose stricter regulations than the national regulator. The precondition is that the...
Persistent link: https://www.econbiz.de/10011640989
We adapt a theoretical model from the goods trade literature to test whether banks with a comparative cost advantage are more likely to enter foreign markets by means of foreign direct investment. We combine detailed proprietary bank-level data on the international activities of all German banks...
Persistent link: https://www.econbiz.de/10010248946