What impact do differences in financial structure have on the macro effects of bank capital requirements in the United States and Australia?

Nassios, Jason; Giesecke, James; Dixon, Peter; Rimmer, Maureen T.

doi:10.1016/j.econmod.2019.08.020

Cited by 6 publications

(3 citation statements)

References 22 publications

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“…We present the features of our model in Figure 3. As discussed in recent work, which incorporates the banking sector as a financial intermediary with a CGE model (Bernanke & Blinder, 1988;Giesecke et al, 2017;Kashyap & Stein, 1995;Nassios et al, 2020), there are three main conditions that a model must satisfy to possess a distinct lending channel. First, the liabilities of agents such as financial capital raised by loans from banks or other sources, including the foreign sector, must be viewed as imperfect substitutes because of the differing default rates and credit risks.…”

Section: Justification Of the Cge Model As A Regulatory Toolmentioning

confidence: 99%

“…Moreover, in Rumler (1999), a 2-country CGE model was used to establish the effect of monetary and fiscal expansion on the economy of two countries. Also (Giesecke et al, 2017;Nassios et al, 2020) argued that bank regulation changes impact offshore activity by domestic banks (changing foreign capital outflows), and the supply of foreign finance (via changes in the current account balance and the nominal exchange rate). We intend to cover some of these issues in our future work.…”

Section: Justification Of the Cge Model As A Regulatory Toolmentioning

confidence: 99%

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A computable general equilibrium model as a banking sector regulatory tool in South Africa

Beyers

Freitas

Essel-Mensah

et al. 2021

South African J Economics

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A computable general equilibrium (CGE) model is used as a regulatory tool for the banking sector in South Africa. The model is used to determine the effects of regulatory penalties, capital adequacy requirements (CAR) and the monetary policy on the economy. Our results indicate that there is a trade‐off between the default and the CAR regulation. For example, when reducing the default penalty, the banks' profits increase, whereas reducing the CAR violation penalty, banks' profits decrease. Changes to the default penalty have a stronger impact than changes in the CAR violation penalty (i.e. when both penalties are reduced, the banks' profits increase). Moreover, regulatory policies that are targeted at different banks produce asymmetric results, as well capitalised banks with richer portfolios swiftly readjust their balance sheet and transfer the default externality to the more constrained banks and/or the private sector agents.

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Section: Justification Of the Cge Model As A Regulatory Toolmentioning

confidence: 99%

Section: Justification Of the Cge Model As A Regulatory Toolmentioning

confidence: 99%

A computable general equilibrium model as a banking sector regulatory tool in South Africa

Beyers

Freitas

Essel-Mensah

et al. 2021

South African J Economics

View full text Add to dashboard Cite

show abstract

“…3. As discussed in recent work which incorporates the banking sector as a financial intermediary with a CGE model (Giesecke et al, 2017;Nassios et al, 2020;Bernanke and Blinder, 1988;Kashyap and Stein, 1995), there are three main conditions that a model must satisfy to possess a distinct lending channel. First, the liabilities of agents such as financial capital raised by loans from banks or other sources, including the foreign sector, must be viewed as imperfect substitutes because of the differing default rates and credit risks.…”

Section: The Banking Sectormentioning

confidence: 99%