Bank regulators are in the process of implementing revised regulatory capital standards. However, the macroeconomic effects of a revised Basel Accord are uncertain. Examining the various channels through which the revised Accord may influence economic output suggests that making the buffer stock...

In recent decades, bank regulators have become increasingly reliant upon quantitative regulatory capital standards as a means of ensuring that banks hold adequate capital. The risk-based capital standards, from the 1988 Accord through the current Basel II standards, have primarily relied upon a...

We analyze small business lending at U.S. commercial banks, how it has changed over time and how it differs by bank size. Specifically, we examine the impact of government policy intervention on small business lending in the aftermath of the financial crisis. We find several important results....

During the 1990s, the composition of commercial bank portfolios in general and bank holdings of business loans and government securities in particular exhibited unusual behavior. One possible explanation for these unusual changes was the implementation by U.S. bank regulators of the risk-based...

In contrast to the 1988 Basel Accord (Basel I), the revised risk-based capital standards (Basel II) propose regulatory capital requirements based on credit ratings. This paper develops a theoretical model to analyze how banks will adjust their low and high credit risk commercial loans under the...