IDEAS home Printed from https://ideas.repec.org/a/ecb/ecbmbu/202000113.html
   My bibliography  Save this article

Financial market pressure as an impediment to the usability of regulatory capital buffers

Author

Listed:
  • Andreeva, Desislava
  • Bochmann, Paul
  • Couaillier, Cyril

Abstract

This article discusses how market pressure can impede the usability of regulatory buffers. The capital relief measures in the euro area since the outbreak of the COVID-19 crisis had so far mixed effects on banks’ target CET1 ratio, suggesting an impeded pass-through. Market pressure can be a key explanatory factor, with pressure from credit and, critically, equity investors. JEL Classification: G01, G21, G28, C58

Suggested Citation

  • Andreeva, Desislava & Bochmann, Paul & Couaillier, Cyril, 2020. "Financial market pressure as an impediment to the usability of regulatory capital buffers," Macroprudential Bulletin, European Central Bank, vol. 11.
    • Handle: RePEc:ecb:ecbmbu:2020:0011:3
    Note: 2285252
    as

    Download full text from publisher

    File URL: https://www.ecb.europa.eu//pub/financial-stability/macroprudential-bulletin/html/ecb.mpbu202010_3~ece3267a72.en.html
    Download Restriction: no
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Lucas Avezum, 2023. "To use or not to use? Capital buffers and lending during a crisis," Working Papers w202308, Banco de Portugal, Economics and Research Department.
    2. Markus Eller & Reiner Martin & Lukas Vashold, 2021. "CESEE’s macroprudential policy response in the wake of the COVID-19 crisis," Focus on European Economic Integration, Oesterreichische Nationalbank (Austrian Central Bank), issue Q1/21, pages 55-69.
    3. Franziska Bremus & Lukas Menkhoff, 2021. "Eigenkapitalpuffer im Abschwung wirksam? [Are Equity Buffers Effective During the Eonomic Downturn?]," Wirtschaftsdienst, Springer;ZBW - Leibniz Information Centre for Economics, vol. 101(3), pages 207-212, March.
    4. Raffaela Casciello & Marco Maffei & David A. Ziebart, 2024. "Regulatory and contextual factors influencing earnings and capital management decisions: evidence from the European banking sector," Review of Quantitative Finance and Accounting, Springer, vol. 63(1), pages 87-146, July.
    5. Cappelletti, Giuseppe & Ponte Marques, Aurea & Varraso, Paolo, 2024. "Impact of higher capital buffers on banks’ lending and risk-taking in the short- and medium-term: Evidence from the euro area experiments," Journal of Financial Stability, Elsevier, vol. 72(C).
    6. Benbouzid, Nadia & Kumar, Abhishek & Mallick, Sushanta K. & Sousa, Ricardo M. & Stojanovic, Aleksandar, 2022. "Bank credit risk and macro-prudential policies: Role of counter-cyclical capital buffer," Journal of Financial Stability, Elsevier, vol. 63(C).
    7. Leitner, Georg & Dvořák, Michal & Magi, Alessandro & Zsámboki, Balázs, 2023. "How usable are capital buffers?," Occasional Paper Series 329, European Central Bank.

    More about this item

    Keywords

    bank ratings; capital buffers; capital target; macroprudential policy; market discipline; solvency-funding cost nexus;
    All these keywords.

    JEL classification:

    • G01 - Financial Economics - - General - - - Financial Crises
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • C58 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Financial Econometrics

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ecb:ecbmbu:2020:0011:3. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Official Publications (email available below). General contact details of provider: https://edirc.repec.org/data/emieude.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.