Competitive effects of Basel II on US bank credit card lending

William Lang, Loretta Mester and Todd A. Vermilyea

Journal of Financial Intermediation, 2008, vol. 17, issue 4, 478-508

Abstract: We analyze the potential competitive effects of the proposed Basel II capital regulations on US bank credit card lending. We find that bank issuers operating under Basel II will face higher regulatory capital minimums than Basel I banks, with differences due to the way the two regulations treat reserves and gain-on-sale of securitized assets. During periods of normal economic conditions, this is not likely to have a competitive effect; however, during periods of substantial stress in credit card portfolios, Basel II banks could face a significant competitive disadvantage relative to Basel I banks and nonbank issuers.

Keywords: Basel; Accord; Basel; II; Capital; requirements; Bank; regulation; Competition (search for similar items in EconPapers)
Date: 2008
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Citations: View citations in EconPapers (3)

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Working Paper: Competitive effects of Basel II on U.S. bank credit card lending (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jfinin:v:17:y:2008:i:4:p:478-508

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