The proposed risk sensitive minimum requirements of the new Basel capital accord have raised concerns about possible (acceleration of) procyclical behaviour of banking, which might threaten macroeconomic stability. This paper analyses the interaction between business cycles and bank behaviour...

The adequate performance of banks, insurers and pension funds is of crucial importance to their private and business customers. The prices and quality of financial products sold by such entities are largely determined by operational efficiency and the degree of competition in the markets...

The proposed risk sensitive minimum requirements of the new Basel Capital Accord have raised concerns about possible (acceleration of) procyclical behaviour of banking, which might threat en macroeconomic stability. This article analyses the interaction between business cycles and banks over the...