Journal of Financial Intermediation Vol. 17 No. 4 2008

Competitive effects of Basel II on US bank credit card lending

William W. Lang¹; Loretta J. Mester^1,2; Todd A. Vermilyea¹

¹ Federal Reserve Bank of Philadelphia · ² University of Pennsylvania

Abstract

We analyze the potential competitive effects of the proposed Basel II capital regulations on US bank credit card lending. We find that bank issuers operating under Basel II will face higher regulatory capital minimums than Basel I banks, with differences due to the way the two regulations treat reserves and gain-on-sale of securitized assets. During periods of normal economic conditions, this is not likely to have a competitive effect; however, during periods of substantial stress in credit card portfolios, Basel II banks could face a significant competitive disadvantage relative to Basel I banks and nonbank issuers.

DOI

10.1016/j.jfi.2007.03.008

Volume

17

Issue

4

Pages

478-508

Language

en

Sources

bibtex:phds-export.bib openalex crossref

Cite

APA 7 MLA 9 Chicago (author–date) Harvard Elsevier Harvard (JFE, JBF…) The Accounting Review Academy of Management American Marketing Association INFORMS (Management Science) Copy citation Copied ✓