ECB paper looks at short-term costs of higher capital ratios

ecb-frankfurt-3

A new paper from the European Central Bank explores the costs and benefits of raising capital requirements.

In Bank capital in the short and in the long run, Caterina Mendicino et al use a macro-banking model to investigate the correct level for capital requirements.

High capital requirements can protect the banking system from collapse in the event of broad declines in asset prices, the authors note, but have potential costs. Raising capital requirements can impose “undue costs on the real

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 [email protected] or view our subscription options here: http://subscriptions.centralbanking.com/subscribe

You are currently unable to copy this content. Please contact [email protected] to find out more.

To continue reading...

You need to sign in to use this feature. If you don’t have a Central Banking account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account here: