Zweifel, Peter; Pfaff, Dieter; Kühn, Jochen - Institut für Betriebswirtschaftslehre, … - 2012
This paper contains a critique of solvency regulation such as imposed on banks by Basel I and II. Banks investment … cost of refinancing but ties costly capital. Sequential decision making by banks is tracked over three periods. In period 1 …, both types of solvency regulation can run counter their stated objective, which may also be true of Basel III. …