Banks are reallocating risk, not reducing it – NY Fed study
Under Basel III, banks’ parent companies have made NBFI subsidiaries more fragile, authors say
Basel III has led to banks’ parent companies transferring risk to their non-bank subsidiaries, research from the Federal Reserve Bank of New York has found.
In a post on July 17, Nicola Cetorelli and Shohini Kundu say banks’ activities have become less risky as a result of Basel III because the regulatory framework has forced them to hold more equity and engage in less risky activities, such as leveraged lending. “Judged at the level of the bank alone, Basel III did exactly what it was designed
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@centralbanking.com or view our subscription options here: www.centralbanking.com/subscriptions
You are currently unable to print this content. Please contact info@centralbanking.com to find out more.
You are currently unable to copy this content. Please contact info@centralbanking.com to find out more.
Copyright Infopro Digital Limited. All rights reserved.
As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (point 2.4), printing is limited to a single copy.
If you would like to purchase additional rights please email info@centralbanking.com
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (clause 2.4), an Authorised User may only make one copy of the materials for their own personal use. You must also comply with the restrictions in clause 2.5.
If you would like to purchase additional rights please email info@centralbanking.com
More on Financial Stability
Nepal has greater stability, but now it needs growth – IMF
Fund’s mission chief says central bank reforms are among measures laying path for future prosperity
IMF paper details system-wide stress-testing methods
Economists propose adding data on bank-NBFI links and details of market microstructure
Europe’s stability at risk if AI bubble bursts – ECB blog
Correction could freeze functioning of continent’s financial markets, say central bank economists
UK has a new prime minister, but the same fiscal woes
Debt, spending and bond markets present challenges for Burnham and BoE, say former MPC members
Libyan governor sets out conditions for withdrawing resignation
Issa reportedly wants faster implementation of budget, trade reforms and halt to wage rises
Brazil’s central bank shuts down two lenders
Move comes amid broader clean-up of country’s weakest financial institutions
SNB welcomes ‘too big to fail’ reforms
Switzerland moves to close Credit Suisse-era gaps with new banking regulations
Argentina eases bank dollar lending to companies
Authorities roll back post-2001 guardrails in effort to boost credit and economic growth