Risky Bank Lending and Optimal Capital Adequacy Regulation /

We study the welfare properties of a New Keynesian monetary economy with an essential role for risky bank lending. Banks lend funds deposited by households to a financial accelerator sector, and face penalties for maintaining insufficient net worth. The loan contract specifies an unconditional lendi...

Täydet tiedot

Bibliografiset tiedot
Päätekijä: Benes, Jaromir
Muut tekijät: Kumhof, Michael
Aineistotyyppi: Aikakauslehti
Kieli:English
Julkaistu: Washington, D.C. : International Monetary Fund, 2011.
Sarja:IMF Working Papers; Working Paper ; No. 2011/130
Linkit:Full text available on IMF
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245 1 0 |a Risky Bank Lending and Optimal Capital Adequacy Regulation /  |c Jaromir Benes, Michael Kumhof. 
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300 |a 1 online resource (27 pages) 
490 1 |a IMF Working Papers 
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500 |a <strong>On-Campus Access:</strong> No User ID or Password Required 
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520 3 |a We study the welfare properties of a New Keynesian monetary economy with an essential role for risky bank lending. Banks lend funds deposited by households to a financial accelerator sector, and face penalties for maintaining insufficient net worth. The loan contract specifies an unconditional lending rate, which implies that banks can make loan losses. Their main response is to raise lending rates to rebuild net worth. Prudential rules that adjust minimum capital adequacy requirements in response to loan losses significantly increase welfare. But the gains from eliminating limited liability and moral hazard would be an order of magnitude larger. 
538 |a Mode of access: Internet 
700 1 |a Kumhof, Michael. 
830 0 |a IMF Working Papers; Working Paper ;  |v No. 2011/130 
856 4 0 |z Full text available on IMF  |u http://elibrary.imf.org/view/journals/001/2011/130/001.2011.issue-130-en.xml  |z IMF e-Library