Bank regulation and risk in Europe and Central Asia since the global financial crisis

Risk Governance & Control: Financial Markets & Institutions

article

Deniz Anginer¹  Asli Demirgüç-Kunt²  Davide Salvatore Mare² 

[1] Beedie School of Business, Simon Fraser University;World Bank

关键词: Banking Regulation;    Banking Supervision;    Bank Capital;    Basel Capital Requirements;    Financial Stability;   

DOI  :  10.22495/rgcv10i1p6

学科分类：社会科学、人文和艺术（综合）

来源: Virtus Interpress

【 摘 要 】

This paper examines changes in bank capital and capital regulations since the global financial crisis, in the Europe and Central Asia region. It shows that banks in Europe and Central Asia are better capitalized, as measured by regulatory capital ratios, than they were prior to the crisis. However, the increase in simple equity ratios for the same banks has been smaller over the past 10 years. The increases in regulatory capital ratios have coincided with a reduction in the stringency of the definition of Tier 1 capital and reduction in risk-weights. We further analyze the relationship between bank capital and bank risk using individual bank data. We show that bank risk in Europe and Central Asia is more sensitive to changes in simple leverage ratios than changes in regulatory capital ratios, consistent with the notion that equity ratios only include high-quality capital and do not rely on internal risk models to compute risk-weights. Although there has been some effort to increase capital and liquidity requirements for institutions deemed systemically important, the region has been lagging in addressing the resolution of these institutions. In line with Demirguc-Kunt, Detragiache, and Merrouche (2013), our findings show the importance of the definition of bank capital to assure bank financial stability in Europe and Central Asia.

【 授权许可】

CC BY-NC