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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 I. - 2016 - This version: July 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/10011578143
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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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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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Bank regulation under fire sale externalities
Kara, Gazi I.; Ozsoy, S. Mehmet - 2016
This paper examines the optimal design of and interaction between capital and liquidity regulations in a model characterized by fire sale externalities. In the model, banks can insure against potential liquidity shocks by hoarding sufficient precautionary liquid assets. However, it is never...
Persistent link: https://www.econbiz.de/10011500208
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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
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Bank failures, capital buffers, and exposure to the housing market bubble
Kara, Gazi I.; Vojtech, Cindy M. - 2017
We empirically document that banks with greater exposure to high home price-to-income ratio regions in 2005 and 2006 have higher mortgage delinquency and charge-off rates and significantly higher probabilities of failure during the last financial crisis even after controlling for capital,...
Persistent link: https://www.econbiz.de/10011803674
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The impact of price controls in two-sided markets : evidence from US debit card interchange fee regulation
Manuszak, Mark D.; Wozniak, Krzysztof - 2017
We study the pricing of deposit accounts following a regulation that capped debit card interchange fees in the United States and provide the first empirical investigation of the link between interchange fees and granular deposit account prices. This link is broadly predicted by the theoretical...
Persistent link: https://www.econbiz.de/10011710091