Market power and banking regulations: Evidence from RDD application to the Brazilian banking market

Alan De Genaro, Pedro Ivo Camacho A. Salvador and Ivan Filipe Fernandes

Economics Letters, 2021, vol. 202, issue C

Abstract: Using an identification strategy based on the Regression Discontinuity Design (RDD) framework, we assess the impacts of a capital surcharge for domestic systemically important banks (D-SIFIs) in Brazil on consumers’ costs after a regulatory change. We explore the discontinuous application of the regulation, which applies only to banks that present a ratio of total assets over GDP greater than 10%. Our findings suggest that banks are repassing the regulatory costs to their clients, either in higher loans or banking fee income.

Keywords: Regulatory costs; Banks; Basel III; RDD (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:202:y:2021:i:c:s0165176521000987

DOI: 10.1016/j.econlet.2021.109821

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