The Basel Committee has proposed linking capital asset requirements for banks to the banks' private sector ratings. Doing so would reduce the capital requirements for banks that lend prudently in high-income countries; the same incentives would not apply in developing countries. Using historical...

Using historical data on sovereign and individual borrowers, the authors assess the potential impact on non-high-income countries of linking capital asset requirements for banks to private sector ratings, as the Basel committee has proposed. They show that linking bank's capital asset...

Analysis of data from emerging economies suggests that, unless properly managed, the introduction of higher minimum bank capital requirements may well induce an aggregate slowdown or contraction of bank credit in these economies

We test for emerging economies the hypothesis — previously verified for G-10 countries only — that the enforcement of bank capital asset requirements (CARs) exerts a detrimental effect on the supply of credit. The econometric analysis on individual bank data suggests three main results....

Analysis of data from emerging economies suggests that, unless properly managed, the introduction of higher minimum bank capital requirements may well induce an aggregate slowdown or contraction of bank credit in these economies

Analysis of data from emerging economies suggests that, unless properly managed, the introduction of higher minimum bank capital requirements may well induce an aggregate slowdown or contraction of bank credit in these economies. Chiuri, Ferri, and Majnoni test for emerging economies the...