Prudential regulation in an artificial banking system

José Dias Curto and Pedro Miguel Mateus Dias Quinaz

No 2016-27, Economics Discussion Papers from Kiel Institute for the World Economy (IfW Kiel)

Abstract: This study constitutes an exploratory analysis of the economic role of banks under different prudential frameworks. It considers an agent-based computational model populated by consumers, firms, banks and a central bank whose out-of-equilibrium interactions replicate the conjunct dynamics of a banking system, a financial market and the real economy. A calibrated version of the model is shown to provide an intelligible account of several recurrent economic phenomena and it can be a privileged ground for policy analysis. The authors' investigation provides a relevant methodological contribution to the field of banking research and sheds new light into the role of banks and their prudential regulation. Specifically, the results suggest that banks are key economic agents. Through their financial intermediation activity, credit institutions facilitate investment and promote growth.

Keywords: agent-based computational model; financial intermediation; prudential policy; bank regulation (search for similar items in EconPapers)
JEL-codes: C63 G28 (search for similar items in EconPapers)
Date: 2016
New Economics Papers: this item is included in nep-cba, nep-cmp, nep-hme and nep-rmg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:ifwedp:201627

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