Back To The Future The Nature Of Regulatory Capital Requirements

Author : Mr.Ralph Chami,Mr.Thomas F. Cosimano,Emanuel Kopp,Ms.Celine Rochon
Publisher : International Monetary Fund
Page : 20 pages
File Size : 44,6 Mb
Release : 2017-08-04
Category : Business & Economics
ISBN : 9781484313817

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Back to the Future: The Nature of Regulatory Capital Requirements by Mr.Ralph Chami,Mr.Thomas F. Cosimano,Emanuel Kopp,Ms.Celine Rochon Pdf

This paper compares the current regulatory capital requirements under the Dodd-Frank Act (DFA) and the 10-percent leverage ratio, as proposed by the U.S. Treasury and the U.S. House of Representatives' Financial CHOICE Act (FCA). We find that the majority of U.S. banks would not qualify for an "off-ramp"option—where regulatory relief is offered to FCA qualifying banks (QBOs)—unless considerable amounts of capital are added, and that large banks are much closer to the proposed leverage threshold and, therefore, are more likely to stand to gain from regulatory relief. The paper identifies an important moral hazard problem that arises due to the QBO optionality, where banks are likely to increase the riskiness of their asset portfolio and qualify for the FCA “off-ramp” relief with unintended effects on financial stability.

Author : Anonim
Publisher : Lulu.com
Page : 294 pages
File Size : 46,5 Mb
Release : 2004
Category : Bank capital
ISBN : 9789291316694

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International Convergence of Capital Measurement and Capital Standards by Anonim Pdf

Author : Ornella Ricci
Publisher : Springer
Page : 229 pages
File Size : 43,9 Mb
Release : 2011-11-21
Category : Business & Economics
ISBN : 9780230358287

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Bancassurance in Europe by Ornella Ricci Pdf

This book offers a comprehensive view on bancassurance from its origin to future challenges and opportunities, considering the relevant changes currently interesting the financial services industry. It also provides a detailed review of theoretical and empirical literature dealing with financial conglomeration.

Author : Tobias Adrian
Publisher : International Monetary Fund
Page : 53 pages
File Size : 44,7 Mb
Release : 2018-08-01
Category : Business & Economics
ISBN : 9781484343913

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Risk Management and Regulation by Tobias Adrian Pdf

The evolution of risk management has resulted from the interplay of financial crises, risk management practices, and regulatory actions. In the 1970s, research lay the intellectual foundations for the risk management practices that were systematically implemented in the 1980s as bond trading revolutionized Wall Street. Quants developed dynamic hedging, Value-at-Risk, and credit risk models based on the insights of financial economics. In parallel, the Basel I framework created a level playing field among banks across countries. Following the 1987 stock market crash, the near failure of Salomon Brothers, and the failure of Drexel Burnham Lambert, in 1996 the Basel Committee on Banking Supervision published the Market Risk Amendment to the Basel I Capital Accord; the amendment went into effect in 1998. It led to a migration of bank risk management practices toward market risk regulations. The framework was further developed in the Basel II Accord, which, however, from the very beginning, was labeled as being procyclical due to the reliance of capital requirements on contemporaneous volatility estimates. Indeed, the failure to measure and manage risk adequately can be viewed as a key contributor to the 2008 global financial crisis. Subsequent innovations in risk management practices have been dominated by regulatory innovations, including capital and liquidity stress testing, macroprudential surcharges, resolution regimes, and countercyclical capital requirements.

Author : International Monetary Fund. Monetary and Capital Markets Department
Publisher : International Monetary Fund
Page : 28 pages
File Size : 45,8 Mb
Release : 2009-04-02
Category : Business & Economics
ISBN : 9781498336376

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Lessons of the Financial Crisis for Future Regulation of Financial Institutions and Markets and for Liquidity Management by International Monetary Fund. Monetary and Capital Markets Department Pdf

This paper seeks to draw lessons for financial sector regulation and supervision and central bank liquidity management from the ongoing crisis, focusing principally on implications for the future rather than on immediate crisis management policies. Inadequacies in macroeconomic policies and the design of the international financial architecture exposed in the crisis will also have to be addressed to make the suggested changes in the regulatory framework effective.

Author : José Abad,Antonio I Garcia Pascual
Publisher : International Monetary Fund
Page : 61 pages
File Size : 48,7 Mb
Release : 2022-01-28
Category : Business & Economics
ISBN : 9781616358938

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Usability of Bank Capital Buffers: The Role of Market Expectations by José Abad,Antonio I Garcia Pascual Pdf

Following the COVID shock, supervisors encouraged banks to use capital buffers to support the recovery. However, banks have been reluctant to do so. Provided the market expects a bank to rebuild its buffers, any draw-down will open up a capital shortfall that will weigh on its share price. Therefore, a bank will only decide to use its buffers if the value creation from a larger loan book offsets the costs associated with a capital shortfall. Using market expectations, we calibrate a framework for assessing the usability of buffers. Our results suggest that the cases in which the use of buffers make economic sense are rare in practice.

Author : Douglas W. Arner,Jànos Barberis,Ross P. Buckley
Publisher : CFA Institute Research Foundation
Page : 20 pages
File Size : 46,7 Mb
Release : 2017-07-31
Category : Business & Economics
ISBN : 9781944960261

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FinTech and RegTech in a Nutshell, and the Future in a Sandbox by Douglas W. Arner,Jànos Barberis,Ross P. Buckley Pdf

The 2008 global financial crisis represented a pivotal moment that separated prior phases of the development of financial technology (FinTech) and regulatory technology (RegTech) from the current paradigm. Today, FinTech has entered a phase of rapid development marked by the proliferation of startups and other new entrants, such as IT and ecommerce firms that have fragmented the financial services market. This new era presents fresh challenges for regulators and highlights why the evolution of FinTech necessitates a parallel development of RegTech. In particular, regulators must develop a robust new framework that promotes innovation and market confidence, aided by the use of regulatory "sandboxes." Certain RegTech developments today are highlighting the path toward another paradigm shift, which will be marked by a reconceptualization of the nature of financial regulation.

Author : Mr.Andre Santos,Douglas Elliott
Publisher : International Monetary Fund
Page : 43 pages
File Size : 50,7 Mb
Release : 2012-09-11
Category : Business & Economics
ISBN : 9781475510089

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Estimating the Costs of Financial Regulation by Mr.Andre Santos,Douglas Elliott Pdf

Staff Discussion Notes showcase the latest policy-related analysis and research being developed by individual IMF staff and are published to elicit comment and to further debate. These papers are generally brief and written in nontechnical language, and so are aimed at a broad audience interested in economic policy issues. This Web-only series replaced Staff Position Notes in January 2011.

Author : Charles Albert Eric Goodhart,Avinash Persaud,Andrew Crockett,International Center for Monetary and Banking Studies,Hyun Shin
Publisher : Geneva Reports on the World Ec
Page : 144 pages
File Size : 46,6 Mb
Release : 2009
Category : Business & Economics
ISBN : UCSD:31822037473311

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The Fundamental Principles of Financial Regulation by Charles Albert Eric Goodhart,Avinash Persaud,Andrew Crockett,International Center for Monetary and Banking Studies,Hyun Shin Pdf

Analytical background -- Nature of systemic risk -- Who should be regulated (by whom) -- Counter-cyclical regulation -- Regulation of liquidity and maturity mismatches -- Other regulatory issues -- The structure of regulation -- Conclusions -- Appendix : the boundary problem in financial regulation -- Discussion and roundtables.

Author : Iain G MacNeil,Justin O'Brien
Publisher : Bloomsbury Publishing
Page : 484 pages
File Size : 40,9 Mb
Release : 2010-03-12
Category : Law
ISBN : 9781847315717

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The Future of Financial Regulation by Iain G MacNeil,Justin O'Brien Pdf

The Future of Financial Regulation is an edited collection of papers presented at a major conference at the University of Glasgow in spring 2009, co-sponsored by the Economic and Social Research Council World Economy and Finance Programme and the the Australian Research Council Governance Research Network. It draws together a variety of different perspectives on the international financial crisis which began in August 2007 and later turned into a more widespread economic crisis following the collapse of Lehman Brothers in the autumn of 2008. Spring 2009 was in many respects the nadir since valuations in financial markets had reached their low point and crisis management rather than regulatory reform was the main focus of attention. The conference and book were deliberately framed as an attempt to re-focus attention from the former to the latter. The first part of the book focuses on the context of the crisis, discussing the general characteristics of financial crises and the specific influences that were at work this time round. The second part focuses more specifically on regulatory techniques and practices implicated in the crisis, noting in particular an over-reliance on the capacity of regulators and financial institutions to manage risk and on the capacity of markets to self-correct. The third part focuses on the role of governance and ethics in the crisis and in particular the need for a common ethical framework to underpin governance practices and to provide greater clarity in the design of accountability mechanisms. The final part focuses on the trajectory of regulatory reform, noting the considerable potential for change as a result of the role of the state in the rescue and recuperation of the financial system and stressing the need for fundamental re-appraisal of business and regulatory models.

Author : Mr.Stijn Claessens,Ms.Laura E. Kodres
Publisher : International Monetary Fund
Page : 39 pages
File Size : 43,9 Mb
Release : 2014-03-14
Category : Business & Economics
ISBN : 9781484336656

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The Regulatory Responses to the Global Financial Crisis by Mr.Stijn Claessens,Ms.Laura E. Kodres Pdf

We identify current challenges for creating stable, yet efficient financial systems using lessons from recent and past crises. Reforms need to start from three tenets: adopting a system-wide perspective explicitly aimed at addressing market failures; understanding and incorporating into regulations agents’ incentives so as to align them better with societies’ goals; and acknowledging that risks of crises will always remain, in part due to (unknown) unknowns – be they tipping points, fault lines, or spillovers. Corresponding to these three tenets, specific areas for further reforms are identified. Policy makers need to resist, however, fine-tuning regulations: a “do not harm” approach is often preferable. And as risks will remain, crisis management needs to be made an integral part of system design, not relegated to improvisation after the fact.

Author : Board of Governors of the Federal Reserve System
Publisher : Unknown
Page : 0 pages
File Size : 48,5 Mb
Release : 2002
Category : Banks and Banking
ISBN : 0894991965

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The Federal Reserve System Purposes and Functions by Board of Governors of the Federal Reserve System Pdf

Provides an in-depth overview of the Federal Reserve System, including information about monetary policy and the economy, the Federal Reserve in the international sphere, supervision and regulation, consumer and community affairs and services offered by Reserve Banks. Contains several appendixes, including a brief explanation of Federal Reserve regulations, a glossary of terms, and a list of additional publications.

Author : Daniel Tarullo
Publisher : Columbia University Press
Page : 256 pages
File Size : 41,6 Mb
Release : 2008-11-30
Category : Business & Economics
ISBN : 9780881324914

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Banking On Basel by Daniel Tarullo Pdf

The turmoil in financial markets that resulted from the 2007 subprime mortgage crisis in the United States indicates the need to dramatically transform regulation and supervision of financial institutions. Would these institutions have been sounder if the 2004 Revised Framework on International Convergence of Capital Measurement and Capital Standards (Basel II accord)—negotiated between 1999 and 2004—had already been fully implemented? Basel II represents a dramatic change in capital regulation of large banks in the countries represented on the Basel Committee on Banking Supervision: Its internal ratings–based approaches to capital regulation will allow large banks to use their own credit risk models to set minimum capital requirements. The Basel Committee itself implicitly acknowledged in spring 2008 that the revised framework would not have been adequate to contain the risks exposed by the subprime crisis and needed strengthening. This crisis has highlighted two more basic questions about Basel II: One, is the method of capital regulation incorporated in the revised framework fundamentally misguided? Two, even if the basic Basel II approach has promise as a paradigm for domestic regulation, is the effort at extensive international harmonization of capital rules and supervisory practice useful and appropriate? This book provides the answers. It evaluates Basel II as a bank regulatory paradigm and as an international arrangement, considers some possible alternatives, and recommends significant changes in the arrangement.

Author : Lawrence D. Cluff
Publisher : DIANE Publishing
Page : 187 pages
File Size : 55,9 Mb
Release : 2000
Category : Electronic
ISBN : 9780788186707

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Risk-Based Capital by Lawrence D. Cluff Pdf

Author : Masahiro Kawai,Eswar Prasad
Publisher : Brookings Institution Press
Page : 441 pages
File Size : 48,8 Mb
Release : 2011
Category : Business & Economics
ISBN : 9780815704898

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Financial Market Regulation and Reforms in Emerging Markets by Masahiro Kawai,Eswar Prasad Pdf

"In the wake of the global financial crisis that began in 2008, offers a systematic overview of recent developments in regulatory frameworks in advanced and emerging-market countries, outlining challenges to improving regulation, markets, and access in developing economies"--Provided by publisher.