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Journal of Financial Stability Vol. 74 2024

Bank capital regulation and risk after the Global Financial Crisis

Deniz Anginer1; Ata Can Bertay2; Robert Cull3; Asli Demirgüç-Kunt; Davide Salvatore Mare3,4

1 Simon Fraser University · 2 Sabancı Üniversitesi · 3 World Bank · 4 University of Edinburgh

open access

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.

DOI
10.1016/j.jfs.2021.100891
Volume
74
Pages
100891
Language
en
Sources
bibtex:phds-export.bib openalex crossref

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