This paper discusses issues in calibrating the countercyclical capital buffer (CCB) based on a sample of EU countries. It argues that the main indicator for buffer decisions under the Basel III framework, the credit-to-GDP gap, does not always work best in terms of covering bank loan losses that...

It is frequently argued that the causes of financial crises are attributed to capital crises, liquidity crises and pro cyclical related issues. The focus accorded by the Basel Committee on Banking Supervision to capital requirements – as opposed to liquidity standards, has also provided...

This paper considers and assesses various explanations attributed as principal factors of the recent Financial Crisis. In particular, it focuses on two principal regulatory tools which constitute the basis of the framework promulgated by recent Basel Committee's initiatives, that is, Basel III....

Liquidity risk has received increased attention recently, especially in light of the 2007-2009 financial crisis, when banks' extensive reliance on short-term funding, maturity mismatches between assets and liabilities, and insufficient liquidity buffers made them quite susceptible to liquidity...

The paper described the historical use of commercial bills in Bank of England operations, and suggests that by making more active use of the policy instrument of central bank asset choice, and by acknowledging the connection between liquidity regulation and open-market operations, central banks...

Basel III uses the gap between the credit-to-GDP ratio and its long-term trend as a guide for setting countercyclical capital buffers. Criticism of this choice centres on three areas: (i) the suitability of the guide given the objective of the buffer; (ii) the early warning indicator properties...

The Net Stable Funding Ratio (NSFR) is a new Basel III liquidity requirement designed to limit funding risk arising from maturity mismatches between bank assets and liabilities. This study explains the NSFR and estimates this ratio for banks in 15 countries. Banks below the ratio need to...

This paper investigates the potential aggravation of the Debt Overhang problem in banking stemming from the introduction of the new Basel III liquidity ratio: the Net Stable Funding Ratio (NSFR). By replacing short for long term debt (or terming out long term debt) on the back of the NSFR, banks...

We use data from the recent global financial crisis to study the importance of several structural funding metrics in characterising banks' resilience. We find that structural funding ratios, including the Basel Committee's Net Stable Funding Ratio (NSFR) which will soon become a new requirement,...