Purpose –The purpose of the paper is to find out which incentives are present for persons who are taking care of financial regulation in practice, and how these incentives impact their attitudes towards complexity of financial regulation. Design/methodology/approach – Based on recent...

This paper examines the sensitivity of non-financial corporate lending to banks' capital ratio and their supervisory capital requirements. We use a unique database for the French banking sector between 2003 and 2011 combining confidential bank-level Bank Lending Survey answers with the...

Basel III has introduced a non-risk-weighted leverage ratio requirement (LRR) which complements the internal ratings based (IRB) capital requirements. It provides a backstop against model risk which arises if some loans get incorrectly rated and become toxic. We study the effects of the LRR on...

We construct a sequential game to highlight the incidence of 'willful default' in a developing country banking system where the borrowing unit underreports its true financial position and defaults willfully. Specifically, the paper deals with the implications of willful default for profitability...