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Bank capital regulation and risk after the Global Financial Crisis

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Listed:
  • Anginer, Deniz
  • Bertay, Ata Can
  • Cull, Robert
  • Demirgüç-Kunt, Asli
  • Mare, Davide S.

Abstract

We explore and summarize the evolution in bank capital regulations and bank risk after the global financial crisis. Using a new survey of bank regulation and supervision covering more than 120 economies, we show that regulatory capital increased, but some elements of capital regulations became laxer. Analyzing bank-level data, we also document the importance of defining bank regulatory capital narrowly as the quality of capital matters in reducing bank risk. This is particularly true for banks that have more discretion in the computation of regulatory capital ratios and are subject to weaker market monitoring.

Suggested Citation

  • Anginer, Deniz & Bertay, Ata Can & Cull, Robert & Demirgüç-Kunt, Asli & Mare, Davide S., 2024. "Bank capital regulation and risk after the Global Financial Crisis," Journal of Financial Stability, Elsevier, vol. 74(C).
    • Handle: RePEc:eee:finsta:v:74:y:2024:i:c:s1572308921000516
    DOI: 10.1016/j.jfs.2021.100891
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    More about this item

    Keywords

    Banking regulation; Banking supervision; Financial Policy; Bank capital; Bank risk-taking;
    All these keywords.

    JEL classification:

    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • 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
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation

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