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A Peer-reviewed scientific articles/A1 Journal article (refereed), original research
      
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Are bank capital requirements optimally set? Evidence from researchers’ views, Journal of Financial Stability October (2020). Ambrocio, Gene; Hasan, Iftekhar; Jokivuolle, Esa; Ristolainen, Kim


Category A Peer-reviewed scientific articles
Sub-category A1 Journal article (refereed), original research
auki Internal authors
All authors as text Ambrocio, Gene; Hasan, Iftekhar; Jokivuolle, Esa; Ristolainen, Kim 
Number of authors
Status Online First
Year of publication 2020 
Date 22.07.2020 
Name of article Are bank capital requirements optimally set? Evidence from researchers’ views 
Name of journal Journal of Financial Stability
Volume of issue 50 
Number of issue October 
Abstract We survey 149 leading academic researchers on bank capital regulation. The median (average) respondent prefers a 10% (15%) minimum non-risk-weighted equity-to-assets ratio, which is considerably higher than the current requirement. North Americans prefer a significantly higher equity-to-assets ratio than Europeans. We find substantial support for the new forms of regulation introduced in Basel III, such as liquidity requirements. Views are most dispersed regarding the use of hybrid assets and bail-inable debt in capital regulation. 70% of experts would support an additional market-based capital requirement. When investigating factors driving capital requirement preferences, we find that the typical expert believes a five percentage points increase in capital requirements would “probably decrease” both the likelihood and social cost of a crisis with “minimal to no change” to loan volumes and economic activity. The best predictor of capital requirement preference is how strongly an expert believes that higher capital requirements would increase the cost of bank lending.
Free text descriptor in Finnish pankit; sääntely; pääoma; pääomavaatimus; asiantuntijat; näkemykset; survey-tutkimukset; Basel III 
Free text descriptor in English Bank regulation; Capital requirements; Expert survey 
JEL-codes G01; G28 
ISSN / e-ISSN 1572-3089 
auki Internet addresses
Additional information Online first 22 July 2020.
Notes BoF DP 10/2020 
Open Access Not known


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