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The effect of bank supervision on risk taking : evidence from a natural experiment
Kandrac, John; Schlusche, Bernd - 2017
In this paper, we exploit a natural experiment in which thrifts in several states witnessed an exogenous reduction in supervisory attention to assess the effect of supervision on financial institutions' willingness to take risk. We show that the affected institutions took on much more risk than...
Persistent link: https://www.econbiz.de/10011710132
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CECL and the credit cycle
Loudis, Bert; Ranish, Ben - 2019
We find that that the Current Expected Credit Loss (CECL) standard would slightly dampen fluctuations in bank lending …
Persistent link: https://www.econbiz.de/10012182062
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The costs and benefits of liquidity regulations : lessons from an idle monetary policy tool
Curfman, Christopher J.; Kandrac, John - 2019
We investigate how liquidity regulations affect banks by examining a dormant monetary policy tool that functions as a liquidity regulation. Our identification strategy uses a regression kink design that relies on the variation in a marginal high-quality liquid asset (HQLA) requirement around an...
Persistent link: https://www.econbiz.de/10012181216
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Bank Capital Regulations Around the World : What Explains the Differences?
Kara, Gazi - 2016
Despite the extensive attention that the Basel capital adequacy standards have received internationally, significant variation exists in the implementation of these standards across countries. Furthermore, a significant number of countries increase or decrease the stringency of capital...
Persistent link: https://www.econbiz.de/10013210425
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Optimal bank regulation in the presence of credit and run risk
Kashyap, Anil K.; Tsomocos, Dimitrios P.; Vardoulakis, … - 2017
We modify the Diamond and Dybvig (1983) model of banking to jointly study various regulations in the presence of credit and run risk. Banks choose between liquid and illiquid assets on the asset side, and between deposits and equity on the liability side. The endogenously determined asset...
Persistent link: https://www.econbiz.de/10011803125
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Less Bank Regulation, More Non-Bank Lending
Chen, Mary; Lee, Seung Jung; Neuhann, Daniel; Saidi, Farzad - 2023
Bank deregulation in the form of the repeal of the Glass-Steagall Act facilitated the entry of non-bank lenders into the market for syndicated loans during the pre-2008 credit boom. Institutional investors disproportionately purchase tranches of loans originated by universal banks able to...
Persistent link: https://www.econbiz.de/10014354765
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Estimating Changes in Supervisory Standards and Their Economic Effects
Bassett, William F. - 2012
The disappointingly slow recovery in the U.S. from the recent recession and financial crisis has once again focused attention on the relationship between financial frictions and economic growth. With bank loans having only recently started growing and still sluggish, some bankers and borrowers...
Persistent link: https://www.econbiz.de/10013096068
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COVID-19 as a Stress Test : Assessing the Bank Regulatory Framework
Abboud, Alice; Duncan, Elizabeth; Horvath, Akos; … - 2021
The broad economic damage of the COVID-19 pandemic poses the first major test of the bank regulatory reforms put in place after the Global Financial Crisis. Our study assesses the U.S. regulatory framework, with an emphasis on capital and liquidity requirements. Prior to the COVID-19 crisis,...
Persistent link: https://www.econbiz.de/10013311493
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The impact of the current expected credit loss standard (CECL) on the timing and comparability of reserves
Chae, Sarah; Sarama, Robert F.; Vojtech, Cindy M.; … - 2018
The new forward-looking credit loss provisioning standard, CECL, is intended to promote proactive provisioning as loan … loss reserves can be conditioned on expectations of the economic cycle. We study the degree to which one modeling decisionâ … portfolios. While we find that provisions are generally less pro-cyclical compared to the current incurred loss standard, CECL …
Persistent link: https://www.econbiz.de/10011927112
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The effects of liquidity regulation on bank demand in monetary policy operations
Rezende, Marcelo; Styczynski, Mary-Frances; Vojtech, … - 2016
We estimate the effects of the liquidity coverage ratio (LCR), a liquidity requirement for banks, on the tenders that banks submit in Term Deposit Facility operations, a Federal Reserve tool created to manage the quantity of bank reserves. We identify these effects using variation in LCR...
Persistent link: https://www.econbiz.de/10011578907