Impact of Bank Regulatory Capital Requirements: On Canadian Banks' Gross Lending Volume

Berenger Piper ()
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Berenger Piper: Business Science Institute & Macro Insight Research Hub

Chapter 2 in The Effect of Changes in Regulatory Capital Requirements on Bank Lending, 2025, pp 17-44 from Springer

Abstract: Abstract This chapter investigated the impact of changes in regulatory capital requirements on the volume of gross loans offered by Canadian banks to the non-financial sector, using econometric methodologies. The study used a sample of annual financial statistics of Canadian financial institutions from 2012 to 2021, from Fitch Connect database, over the period of 2012 to 2021. The data also encompasses macroeconomic statistics from the Bank of Canada, BIS, and Economic Policy Uncertainty Research Group. The results found that increases in Canadian regulatory bank capital requirement ratio led to a decrease in the volume of gross loan offered by Canadian banks to the non-financial sector, over the current year, considering macroeconomic control variables.

Keywords: Basel Accords; Regulatory Capital Requirements; Canadian Bank Lending Behaviour; Canadian Bank Lending Volume; Macroprudential Regulations; Microprudential Regulations; GDP; Bank Size; Bank Liquidity; Monetary Policy; Inflation Rate (CPI); GDP Gap; Business Climate; and Credit-to-GDP Gap (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-032-02208-0_2

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DOI: 10.1007/978-3-032-02208-0_2

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