Assessing Banks’ Cost of Complying with Basel II

David VanHoose

No 2007-PB-10, NFI Policy Briefs from Indiana State University, Scott College of Business, Networks Financial Institute

Abstract: This policy brief assesses the implications of Basel II for bank regulatory compliance costs. In spite of widespread complaints by bankers about the costs of complying with Basel II rules, the academic literature has given surprisingly little attention to quantifying these costs. The brief discusses estimates of Basel II compliance costs based on commonly utilized rules of thumb and on survey data collected by the Office of the Comptroller of the Currency (OCC). In addition, it utilizes OCC bank-level compliance-cost estimates to speculate about the potential for economies of scale in Basel II compliance. There is unavoidable imprecision associated with compliance-cost estimates. Nevertheless, costs of implementing Basel II ultimately should matter for the U.S. banking industry, both in terms of how the overall magnitudes of compliance costs may influence banks’ strategic-path choices as well as their on-going operating decisions.

Keywords: Basel II; bank regulatory compliance costs (search for similar items in EconPapers)
JEL-codes: E51 G28 (search for similar items in EconPapers)
Pages: 18 pages
Date: 2007-09
References: View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://www.indstate.edu/business/sites/business.in ... 7-PB-10_VanHoose.pdf Full text (application/pdf)
Our link check indicates that this URL is bad, the error code is: 404 Not Found (http://www.indstate.edu/business/sites/business.indstate.edu/files/Docs/2007-PB-10_VanHoose.pdf [301 Moved Permanently]--> https://indianastate.edu/business/sites/business.indstate.edu/files/Docs/2007-PB-10_VanHoose.pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nfi:nfipbs:2007-pb-10

Access Statistics for this paper

More papers in NFI Policy Briefs from Indiana State University, Scott College of Business, Networks Financial Institute Contact information at EDIRC.
Bibliographic data for series maintained by Ray Thomas ().