Loan Pricing under Basel II in an Imperfectly Competitive Banking Market

The new Basel Capital Accord (Basel II), published in its final form in June 2006, established new and revised capital requirements for banks. In this paper we analyze and estimate the possible effects of the new rules on the pricing of bank loans. We do that for the two approaches for capital requirements (Internal and Standardized) available to banks and make a distinction between retail (mainly households) and corporate customers. Our loan equation is based on a model of a banking firm facing uncertainty operating in an imperfectly competitive loan market. We use Israeli economic data and data of a leading Israeli bank, including probability of default of its retail and corporate customers. The main results indicate that high quality corporates and retail customers will enjoy a reduction in loan interest rates in (large) banks which, most probably, will adopt the IRB approach. On the other hand high risk customers will benefit by shifting to (small) banks which, most probably, will that adopt the Standardized approach

Towards an object-relations understanding of the borderline personality

Bibliography: leaf 188-192.This study aimed at providing a comprehensive Object-Relations understanding of the borderline personality. Towards that end theoretical issues related to the borderline concept were introduced and certain controversial aspects were briefly discussed. A review of the pertinent descriptive literature attempting to detail borderline symptomatology was presented. The enormous discrepancies, inconsistencies and contradictions evident in this area emerged from the strongly contrasting descriptions of the various workers in this field. A borderline symptom profile was introduced, based on both the descriptive literature review and the author's own experience, which served as a reference point for the dynamic formulations which followed. The theoretical formulations aimed at understanding a borderline personality structure were traced from their origins in Freud and Abraham. Melanie Klein was seen to play a central role in providing key conceptual tools for understanding borderline phenomena, and pertinent aspects of her theory were presented in some detail. Modern American and European contributions were then introduced and a division along environmental-intropsychic axes emerged with respect to borderline aetiology. The study concluded with a selective synthesis of this division, which was then applied to two of the author's own case studies. The role of fantasy, and the structuring of mental processes were specifically emphasised for arriving at an adequate understanding of the borderline personality

Loan Pricing under Basel II in an Imperfectly Competitive Banking Market

The new Basel Capital Accord (Basel II), published in its final form in June 2006, established new and revised capital requirements for banks. In this paper we analyze and estimate the possible effects of the new rules on the pricing of bank loans. We do that for the two approaches for capital requirements (Internal and Standardized) available to banks and make a distinction between retail (mainly households) and corporate customers. Our loan equation is based on a model of a banking firm facing uncertainty operating in an imperfectly competitive loan market. We use Israeli economic data and data of a leading Israeli bank, including probability of default of its retail and corporate customers. The main results indicate that high quality corporates and retail customers will enjoy a reduction in loan interest rates in (large) banks which, most probably, will adopt the IRB approach. On the other hand high risk customers will benefit by shifting to (small) banks which, most probably, will that adopt the Standardized approach

Loan pricing under Basel II in an imperfectly competitive banking market

The new Basel II Accord (2006), established new and revised capital requirements for banks. In this paper we analyze and estimate the possible effects of the new rules on the pricing of bank loans. We relate to the two approaches for capital requirements (internal and standardized) and distinguish between retail and corporate customers. Our loan-equation is based on a model of a banking firm facing uncertainty operating in an imperfectly competitive loan market. We use Israeli economic data and data of a leading Israeli bank. The main results indicate that high quality corporate and retail customers will enjoy a reduction in loan interest rates in (big) banks which, most probably, will adopt the IRB approach. On the other hand high risk customers will benefit by shifting to (small) banks that adopt the standardized approach.Basel II Minimum capital requirements Internal rating based (IRB) approach Standardized approach Probabilities of default (PD) Loss given default (LGD) Value-at-Risk (VaR) Unexpected loss (UL) Exposure at default (EAD) Retail customers Corporate customers

Diversification and Performance in Banking: The Israeli Case

Diversification gains, efficient frontier, optimal portfolio, RAROCV—risk adjusted return on capital, VARV—value at risk,