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The new basel capital accord: implications for the EU banking system

Objectif

Prudential regulations of banks are viewed as instruments to prohibit banks from investing in risky projects, and thus protect banking system from the problems discussed above. To this end, several mechanisms are used by the central banking authorities. Two popular instruments are minimum capital requirements and deposit rate ceilings.

Higher capital implies higher losses for banks' shareholders in the event of default, and consequently less incentives for involvement in high risk activities. Recent phenomenon of bank failures in the developed as well as in the emerging economies called for the use of more stringent regulatory responses as seen in the New Basel Capital Accord (2001). In this project, we seek to focus on the impact of the tightening of capital standards on the behaviour of commercial banks towards risk while making investment decisions.

The main goal of this project is to examine the impact of higher capital standards on bank behaviour in the context of the European banking system. We would like to study the relationships between capital standards and prudent bank behaviour when the banks compete for depositors. The project focuses on studying prudential regulations of banks in the presence of regulatory authority and competing banks in a general (competitive) equilibrium framework.

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Mots‑clés

Thème(s)

Appel à propositions

FP6-2002-MOBILITY-5
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Régime de financement

EIF - Marie Curie actions-Intra-European Fellowships

Coordinateur

UNIVERSITE CATHOLIQUE DE LOUVAIN
Contribution de l’UE
Aucune donnée
Adresse


Belgique
Coût total
Aucune donnée