TY  - BOOK
AU  - Agenor,Pierre-Richard
AU  - Agenor,Pierre-Richard
AU  - Pereira da Silva,Luiz A.
TI  - Cyclical Effects of Bank Capital Requirements With Imperfect Credit Markets
PY  - 2009///
CY  - Washington, D.C.
PB  - The World Bank
KW  - Access to Finance
KW  - Bank capital
KW  - Banks and Banking Reform
KW  - Borrowing
KW  - Capital adequacy
KW  - Capital markets
KW  - Capital regulation
KW  - Capital requirements
KW  - Contract enforcement
KW  - Currencies and Exchange Rates
KW  - Debt Markets
KW  - Deposits
KW  - Economic Theory and Research
KW  - Finance and Financial Sector Development
KW  - Financial markets
KW  - Financial stability
KW  - Housing
KW  - Inadequate disclosure
KW  - Interest rates
KW  - Macroeconomics and Economic Growth
KW  - Market discipline
KW  - Prudential regulations
KW  - Regulatory framework
KW  - Writedowns
N2  - This paper analyzes the cyclical effects of bank capital requirements in a simple model with credit market imperfections. Lending rates are set as a premium over the cost of borrowing from the central bank, with the premium itself depending on firms' effective collateral. Basel I- and Basel II-type regulatory regimes are defined and a capital channel is introduced through a signaling effect of capital buffers on the cost of bank deposits. The macroeconomic effects of various shocks (a drop in output, an increase in the refinance rate, and a rise in the capital adequacy ratio) are analyzed, under both binding and nonbinding capital requirements. Factors affecting the procyclicality of each regime (defined in terms of the behavior of the risk premium) are also identified and policy implications are discussed
UR  - http://elibrary.worldbank.org/doi/book/10.1596/1813-9450-5067
ER  -