Can Federal Home Loan Banks effectively self-regulate lending to influential banks?

Acrey, James Cash; Lee, Wayne; Yeager, Timothy J.

doi:10.1057/s41261-018-0082-3

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Cited by 2 publications

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“…Siems (2012) confirms the consistency of the ratio as bank failure predictor across banks of different US member states. Acrey et al (2019) account for an asymmetric effectiveness of the ratio in predicting bank failures according to the bank type (i.e. large banks vs community banks).…”

Section: Coverage and Riskmentioning

confidence: 99%

The Effects of Capital on Bank Risk-Taking: New Evidence for the European Banking System

Floreani,

Velliscig,

Stefano

et al. 2023

TEL

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After the eruption of the global financial crisis, the banking sector has gone through profound regulatory reforms aimed at strengthening the stability of the entire financial system. Based on a sample of 62 listed banks in the European Economic Area Region, during the period 2005q1-2018q4, this paper investigates the impact of capital policies on bank risk-taking. Results show how the Tier 1 capital ratio and the Tier 1 leverage ratio represent a crucial factor in explaining bank risk, especially for small banks and during financial turmoil periods. Additionally, we find that the introduction of mandatory disclosure of the Tier 1 leverage ratio and the Tier 1 capital ratio reduced the bank risk-taking of higher leveraged and capitalized banks. Our findings have significant implications for both the banking industry and policymakers alike.

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Section: Coverage and Riskmentioning

confidence: 99%