The regulation of bank capital as a means of smoothing the credit cycle is a central element of forthcoming macro‐prudential regimes internationally. For such regulation to be effective in controlling the aggregate supply of credit it must be the case that: (i) changes in capital requirements...

type="main" <title type="main">ABSTRACT</title> <p>We examine large public interventions in the financial sector, such as bank nationalizations and search for “financial protectionism,” a decrease in the quantity and/or an increase in the price of loans that banks from one country make to borrowers resident in another....</p>

type="main" xml:id="ecop12026-abs-0001" <title type="main">Summary</title> <p>What kinds of credit substitution, if any, occur when changes to banks’ minimum capital requirements induce them to change their willingness to supply credit? The question is of first-order importance given the emergence of ‘macro-prudential’...</p>