Banking-on-the-Average Rules

Cite This

Files in this item

Files Size Format View

There are no files associated with this item.

GERSBACH, Hans, Volker HAHN, 2019. Banking-on-the-Average Rules. In: CESifo Economic Studies. Oxford University Press (OUP). 65(2), pp. 131-153. ISSN 1610-241X. eISSN 1612-7501. Available under: doi: 10.1093/cesifo/ify023

@article{Gersbach2019Banki-24663.2, title={Banking-on-the-Average Rules}, year={2019}, doi={10.1093/cesifo/ify023}, number={2}, volume={65}, issn={1610-241X}, journal={CESifo Economic Studies}, pages={131--153}, author={Gersbach, Hans and Hahn, Volker} }

<rdf:RDF xmlns:dcterms="" xmlns:dc="" xmlns:rdf="" xmlns:bibo="" xmlns:dspace="" xmlns:foaf="" xmlns:void="" xmlns:xsd="" > <rdf:Description rdf:about=""> <dcterms:abstract xml:lang="eng">In this article, we introduce a new way to determine requirements for bank capital: banking-on-the-average rules. Under these rules, a bank’s required level of equity capital is monotonically increasing in the realized equity capital of its peers. In a simple model, we illustrate the workings of banking-on-the-average rules. We show that in booms, these rules can prevent banks from taking excessive risks. Moreover, they alleviate the socially harmful procyclicality of conventional equity-capital rules, which may induce banks to cut back excessively on lending. Finally, we argue that under these rules, prudent banks can impose prudence on other banks. In addition, banking-on-the-average rules ensure the build-up of bank equity capital in booms and thus avoid excessive leverage.</dcterms:abstract> <foaf:homepage rdf:resource="http://localhost:8080/jspui"/> <void:sparqlEndpoint rdf:resource="http://localhost/fuseki/dspace/sparql"/> <dc:rights>terms-of-use</dc:rights> <dcterms:isPartOf rdf:resource=""/> <dcterms:rights rdf:resource=""/> <dc:date rdf:datatype="">2020-02-13T09:14:49Z</dc:date> <dcterms:available rdf:datatype="">2020-02-13T09:14:49Z</dcterms:available> <dspace:isPartOfCollection rdf:resource=""/> <dc:contributor>Gersbach, Hans</dc:contributor> <dcterms:issued>2019</dcterms:issued> <dcterms:title>Banking-on-the-Average Rules</dcterms:title> <dc:language>eng</dc:language> <dc:creator>Gersbach, Hans</dc:creator> <dc:creator>Hahn, Volker</dc:creator> <dc:contributor>Hahn, Volker</dc:contributor> <bibo:uri rdf:resource=""/> </rdf:Description> </rdf:RDF>

This item appears in the following Collection(s)

Version History

Version Item Date Summary Publication Version

*Selected version

Search KOPS


My Account