Is Basel turning banks into public utilities?

John M. Schiff
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John M. Schiff: NYU Stern School of Business

Journal of Financial Perspectives, 2015, vol. 3, issue 1, 04-12

Abstract: This paper looks at the effects of Basel III on the long-run profitability prospects of banks. It is argued that the new restriction on maturity mismatching and leverage will mitigate the "special" role banks play in the economy. Indeed, it will turn them into over-regulated public utilities with limited profitability and ability to innovate. The major thesis is that regulators appear to have forgotten that banks are "special" in terms of the economic benefits they provide to an economy, and that such benefits enhance social welfare.

Keywords: Basel III; regulations (search for similar items in EconPapers)
JEL-codes: G10 G38 (search for similar items in EconPapers)
Date: 2015
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Persistent link: https://EconPapers.repec.org/RePEc:ris:jofipe:0058

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