Repullo, Rafael; Suarez, Javier - Centro de Estudios Monetarios y Financieros (CEMFI) - 2008
We analyze the cyclical effects of moving from risk-insensitive (Basel I) to risk-sensitive (Basel II) capital requirements in the context of a dynamic equilibrium model of relationship lending in which banks are unable to access the equity markets every period. Banks anticipate that shocks to...