Banking Supervision in Integrated Financial Markets: Implications for the EU

I analyze the optimal design of banking supervision in the presence of cross-border lending. Cross-border lending could imply that an individual bank failure in one country could trigger negative spillover effects in another country. Such cross-border contagion effects could turn out to be important in the EU because national banking problems could easily spread via the highly integrated interbank market. I show that if benevolent supervisors are accountable only to their own jurisdiction, they will not take cross-border contagion effects into account. Supervisors with such a national mandate fail to implement the optimum from a supranational perspective. In consequence, the probability of a bank failure will be inefficiently high. Against the background of this result, I argue in favor of institutionalizing an EU ”Supervisory Coordination Authority” to which national supervisors are accountable.banking supervision, systemic risk, cross-border contagion

Banks' regulatory capital buffer and the business cycle: evidence for German savings and cooperative banks

This paper analyzes the effect of the business cycle on the regulatory capital buffer of German savings and cooperative banks in the period 1993-2003. The capital buffer is found to fluctuate anticyclically over the business cycle. The fluctuation is stronger for savings banks than for cooperative banks, as, for savings banks, risk-weighted assets fluctuate more strongly with the business cycle. Further, low-capitalized banks do not catch up with their wellcapitalized peers. The gap between low-capitalized and well capitalized banks even widened over the observation period. Finally, low-capitalized banks do not decrease risk-weighted assets in a business cycle downturn by more than well-capitalized banks. This finding seems to imply that their low capitalization does not force them to retreat from lending. --Capital Regulation,Bank Capital,Business Cycle Fluctuations

Banks' regulatory buffers, liquidity networks and monetary policy transmission

Based on a quarterly regulatory dataset for German banks from 1999 to 2004, this paper analyzes the effects of banks’ regulatory capital on the transmission of monetary policy in a system of liquidity networks. The dynamic panel regression results provide evidence in favor of the bank capital channel theory. Banks holding less regulatory capital and less interbank liquidity react more restrictively to a monetary tightening than their peers. --Monetary policy transmission,Bank lending channel,Bank capital channel,Liquidity networks

Extraordinary measures in extraordinary times – Public measures in support of the financial sector in the EU and the United States

The extensive public support measures for the financial sector have been key for the management of the current financial crisis. This paper gives a detailed description of the measures taken by central banks and governments and attempts a preliminary assessment of the effectiveness of such measures. The geographical focus of the paper is on the European Union (EU) and the United States. The crisis response in both regions has been largely similar in terms of both tools and scope, and monetary policy actions and bank rescue measures have become increasingly intertwined. However, there are important differences, not only between the EU and the United States (e.g. with regard to the involvement of the central bank), but also within the EU (e.g. asset relief schemes). JEL Classification: C43, E31, O47, R31bank rescue measures, public crisis management

Extraordinary measures in extraordinary times: Public measures in support of the financial sector in the EU and the United States

The extensive public support measures for the financial sector have been key for the management of the current financial crisis. This paper gives a detailed description of the measures taken by central banks and governments and attempts a preliminary assessment of the effectiveness of such measures. The geographical focus of the paper is on the European Union (EU) and the United States. The crisis response in both regions has been largely similar in terms of both tools and scope, and monetary policy actions and bank rescue measures have become increasingly intertwined. However, there are important differences, not only between the EU and the United States (e.g. with regard to the involvement of the central bank), but also within the EU (e.g. asset relief schemes). --Bank rescue measures,public crisis management

Does capital regulation matter for bank behaviour? Evidence for German savings banks

The aim of this paper is to assess how German savings banks adjust capital and risk under capital regulation. We estimate a modified version of the model developed by Shrieves and Dahl (1992). This paper contributes to the literature in three ways. First, we test the capital buffer theory (Marcus 1984, Milne and Whalley 2002). Second, we use dynamic panel data techniques that explicitly take unobserved heterogeneity into account. And third, we provide new evidence for non-US banks by using a new dataset of supervisory data collected by the Deutsche Bundesbank. We find evidence that the coordination of capital and risk adjustments depends on the amount of capital the bank holds in excess of the regulatory minimum (the "capital buffer"). Banks with low capital buffers try to rebuild an appropriate capital buffer by raising capital while simultaneously lowering risk. In contrast, banks with high capital buffers try to maintain their capital buffer by increasing risk when capital increases. These findings support the capital buffer theory. --bank regulation,risk taking,bank capital

Familiengärten - Biogärten: Ansätze zur Förderung der Ökologisierung städtischer Flächen

Die Studie zu den Einstellungen, dem Wissen und der Umsetzung des biologischen Gärtnerns in vier Schweizer Städten hat sechs zentrale Resultate bzw. Schwachstellen hervorgebracht. Die Analyse konnte zeigen, dass die Eigendefinition und Praxis als BiogärtnerIn nicht immer überein stimmen. GärtnerInnen, welche sich selbst als BiogärtnerInnen bezeichnen, haben ihrer eigenen Einschätzung nach nur teilweise viel Wissen zum Biogärtnern und wenden auch nicht immer biologische Methoden an. Des Weiteren wurde aufgezeigt, dass biologisches Gärtnern teilweise negativ wahrgenommen und mit nachlässiger Gartenbewirtschaftung gleichgesetzt wird. Seitens der Vereine/Städte gibt es teilweise Vorschriften zum biologischen Gärtnern, diese sind aber nicht allen GärtnerInnen bewusst. Auf der einen Seite wird das Informationsangebot zum biologischen Gärtnern nur begrenzt wahrgenommen. Auf der anderen Seite steht den GärtnerInnen aber auch nur ein begrenztes Angebot an Informationen zur Verfügung. Eine zentrale Rolle bei der biologischen Gartenpraxis spielt die Bedeutung der biologischen Gartenbewirtschaftung im Umfeld der GärtnerInnen. Biologisches Gärtnern wird seitens der NachbarInnen und der Vereine nur zum Teil aktiv unterstützt. GärtnerInnen nichtdeutscher bzw. nichtfranzösischer Muttersprache setzen, laut eigenen Angaben, weniger oft Massnahmen des Biogärtnerns um, haben aber grosses Interesse an biologischer Gartenbewirtschaftung. Basierend auf den Ergebnissen wurden verschiedene Massnahmen zur Förderung der biologische Bewirtschaftung von Familiengärten aufgezeigt

The Relationship between Bank Capital, . . .

Sie dürfen die Dokumente nicht für öffentliche oder kommerziell

The Relationship between Bank Capital, Risk-Taking, and Capital Regulation: A Review of the Literature

Bank capital regulation seems to be todayÂ’s most accepted regulatory instrument. The reasoning is that limited liability and deposit insurance appear to give banks incentives for excessive risk-taking. Capital requirements can alleviate this problem as banks are obliged to hold more capital which forces them to have more of their own funds at risk. But the theoretical literature has much more to say on how banks determine their capital structure and portfolio risk and how capital regulation influences this decision. This paper attempts to give an overview of the literature in order to see what theory suggests, what empirics seem to tell us, and what there is still to do for future research.Banking regulation, deposit insurance, capital structure