Banking-on-the-Average Rules

dc.contributor.authorGersbach, Hansdeu
dc.contributor.authorHahn, Volkerdeu
dc.date.accessioned2014-03-28T09:54:43Zdeu
dc.date.available2014-03-28T09:54:43Zdeu
dc.date.issued2010deu
dc.description.abstractIn this paper, we introduce a new requirement 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 prudency 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.eng
dc.identifier.urihttp://kops.uni-konstanz.de/handle/123456789/24663
dc.language.isoengdeu
dc.legacy.dateIssued2014-03-28deu
dc.relation.ispartofseriesWorking Papers of the Center of Economic Research at ETH Zurich;09/107deu
dc.rightsterms-of-usedeu
dc.rights.urihttps://rightsstatements.org/page/InC/1.0/deu
dc.subjectbanking on the averagedeu
dc.subjectequity-capital requirementsdeu
dc.subjectbanking systemdeu
dc.subjectbanking crisisdeu
dc.subject.ddc330deu
dc.subject.jelG21, G28deu
dc.titleBanking-on-the-Average Ruleseng
dc.typeWORKINGPAPERdeu
dspace.entity.typePublication
kops.description.commenthttp://www.cer.ethz.ch/mip/people/vhahn/BankingAverage.pdfdeu
kops.flag.knbibliographyfalse
kops.identifier.nbnurn:nbn:de:bsz:352-246633deu
kops.submitter.emailoffice.imm@uni-konstanz.dedeu
temp.submission.doi
temp.submission.source
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