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Dewatripont, Mathias
and Tirole, Jean
(2012)
Macroeconomic Shocks and Banking Regulation.
Journal of Money, Credit and Banking, 44.
pp. 237-254.
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Abstract
The recent crisis has brought to the fore the cyclical properties of banking regulation. Countercyclical buffers and enhanced capital requirements meant to stabilize banks' balance sheets across the cycle are not costless, and a delicate balance needs to be reached between providing incentives to generate value and discouraging excessive risk-taking.
The paper develops a model in which, in contrast with Modigliani-Miller, outside equity and capital requirements matter. It analyses banking regulation in the presence of macroeconomic shocks and studies the desirability of self-insurance mechanisms such as countercyclical capital buffers or dynamic provisioning, as well as "macro-hedges" such as CoCos and capital insurance.
| Item Type: | Article |
|---|---|
| Language: | English |
| Date: | December 2012 |
| Refereed: | Yes |
| Uncontrolled Keywords: | Banking regulation, macroeconomic shocks, countercyclical capital requirements |
| JEL Classification: | E32 - Business Fluctuations; Cycles G21 - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages G28 - Government Policy and Regulation |
| Subjects: | B- ECONOMIE ET FINANCE |
| Divisions: | TSE-R (Toulouse) |
| Site: | UT1 |
| Date Deposited: | 09 Jul 2014 17:28 |
| Last Modified: | 02 Apr 2021 15:47 |
| OAI Identifier: | oai:tse-fr.eu:26128 |
| URI: | https://publications.ut-capitole.fr/id/eprint/15376 |
