Bank Behavior in Response to Basel Iii : A Cross-Country Analysis /

This paper investigates the impact of the new capital requirements introduced under the Basel III framework on bank lending rates and loan growth. Higher capital requirements, by raising banks' marginal cost of funding, lead to higher lending rates. The data presented in the paper suggest that...

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Detalhes bibliográficos
Autor principal: Cosimano, Thomas
Outros Autores: Hakura, Dalia
Formato: Periódico
Idioma:English
Publicado em: Washington, D.C. : International Monetary Fund, 2011.
coleção:IMF Working Papers; Working Paper ; No. 2011/119
Acesso em linha:Full text available on IMF
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245 1 0 |a Bank Behavior in Response to Basel Iii :   |b A Cross-Country Analysis /  |c Thomas Cosimano, Dalia Hakura. 
264 1 |a Washington, D.C. :  |b International Monetary Fund,  |c 2011. 
300 |a 1 online resource (34 pages) 
490 1 |a IMF Working Papers 
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500 |a <strong>On-Campus Access:</strong> No User ID or Password Required 
506 |a Electronic access restricted to authorized BRAC University faculty, staff and students 
520 3 |a This paper investigates the impact of the new capital requirements introduced under the Basel III framework on bank lending rates and loan growth. Higher capital requirements, by raising banks' marginal cost of funding, lead to higher lending rates. The data presented in the paper suggest that large banks would on average need to increase their equity-to-asset ratio by 1.3 percentage points under the Basel III framework. GMM estimations indicate that this would lead large banks to increase their lending rates by 16 basis points, causing loan growth to decline by 1.3 percent in the long run. The results also suggest that banks' responses to the new regulations will vary considerably from one advanced economy to another (e.g. a relatively large impact on loan growth in Japan and Denmark and a relatively lower impact in the U.S.) depending on cross-country variations in banks' net cost of raising equity and the elasticity of loan demand with respect to changes in loan rates. 
538 |a Mode of access: Internet 
700 1 |a Hakura, Dalia. 
830 0 |a IMF Working Papers; Working Paper ;  |v No. 2011/119 
856 4 0 |z Full text available on IMF  |u http://elibrary.imf.org/view/journals/001/2011/119/001.2011.issue-119-en.xml  |z IMF e-Library