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Macroeconomic Impact of Basel III: Evidence from a Meta-Analysis

Author

Listed:
  • Jarko Fidrmuc

    (Zeppelin University Friedrichshafen)

  • Ronja Lind

    (Zeppelin University Friedrichshafen)

Abstract

We present a meta-analysis of the impact of higher capital requirements imposed by regulatory reforms on the macroeconomic activity (Basel III). The empirical evidence derived from a unique dataset of 48 primary studies indicates that there is a negative, albeit moderate GDP level effect in response to a change in the capital ratio. The effects are likely to be slightly stronger but still low for the CEECs. Meta-regression results suggest that the estimates reported in the literature tend to be systematically influenced by a selected set of study characteristics, such as econometric specifications, the authors’affiliations, and the underlying financial system. Finally, we document a significant positive publication bias.

Suggested Citation

  • Jarko Fidrmuc & Ronja Lind, 2017. "Macroeconomic Impact of Basel III: Evidence from a Meta-Analysis," Working and Discussion Papers WP 5/2017, Research Department, National Bank of Slovakia.
    • Handle: RePEc:svk:wpaper:1046
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    References listed on IDEAS

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    More about this item

    Keywords

    Meta-analysis; Bayesian model averaging; publication bias; banking; capital requirements; Basel III;
    All these keywords.

    JEL classification:

    • E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation

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