- Description
- 18 p.; 21 x 29.7cm.
- Summary
- Bank regulation might have contributed to or even reinforced adverse systemic shocks that materialised during the financial crisis. Capital regulation based on risk-weighted assets encourages innovation designed to circumvent regulatory requirements and shifts banks' focus away from their core economic functions. Tighter capital requirements based on risk-weighted assets may further contribute to these skewed incentives. The estimated macroeconomic costs of redirecting banks' attention away from such unconventional business practices are low. During a medium-term adjustment period, for each percentage point of bank equity, regulation that is not based on risk-weighted assets would affect annual GDP growth by -0.02 percentage point more than under the risk-weighted assets framework. Refocusing banks' attention toward their main economic functions is a core requirement for durable financial stability and sustainable economic growth.
- Series Statement
- OECD Economics Department Working Papers, 1815-1973 ; no.916
- Uniform Title
- OECD Economics Department Working Papers, no.916.
- Subject
- Economics
- LCCN
- 10.1787/5kg0ps8cq8q6-en
- OCLC
- oecd-lib-000878
- Author
Slovik, Patrick.
- Title
Systemically Important Banks and Capital Regulation Challenges [electronic resource] / Patrick Slovik
- Imprint
Paris : OECD Publishing, 2012.
- Series
OECD Economics Department Working Papers, 1815-1973 ; no.916
OECD Economics Department Working Papers, 1815-1973 ; no.916.
- Connect to:
- Indexed Term
Economics
- Other Standard Identifier
10.1787/5kg0ps8cq8q6-en doi