Economics at your fingertips  

Bank capital and liquidity regulation

Asako Chiba ()
Additional contact information
Asako Chiba: Tokyo Foundation for Policy Research

Journal of Banking Regulation, 2022, vol. 23, issue 2, No 2, 120-138

Abstract: Abstract Since the global financial crisis, banking regulations have become more stringent and complex. In particular, capital and liquidity adequacy requirements have been discussed extensively in various contexts. This study constructs a general equilibrium model that incorporates banks and households that hold both liquid and illiquid assets to compare the economic effects of capital and liquidity adequacy requirements. Simulations show that liquidity regulation in the style of current the Basel Accord, as well as capital regulation, reduces the probability of financial crisis after a recession, not only by restricting banks’ leverage, but also by aiding the recovery of asset prices.

Keywords: Capital regulation; Liquidity regulation; Financial crisis; Basel III (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link) Abstract (text/html)
Access to full text is restricted to subscribers.

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:

Ordering information: This journal article can be ordered from

DOI: 10.1057/s41261-021-00157-1

Access Statistics for this article

Journal of Banking Regulation is currently edited by Dalvinder Singh

More articles in Journal of Banking Regulation from Palgrave Macmillan
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().

Page updated 2022-07-30
Handle: RePEc:pal:jbkreg:v:23:y:2022:i:2:d:10.1057_s41261-021-00157-1