Countercyclical Capital and Currency Dependence

Jón Daníelsson and Ásgeir Jónsson

Financial Markets, Institutions & Instruments, 2005, vol. 14, issue 5, 329-348

Abstract: The introduction of risk sensitive bank capital charges into currency dependent economies exasperates the inherent procyclicality of banking regulations and frustrates the conduct of monetary policy. The authors argue that, by requiring capital charges resulting from foreign currency lending to be denominated in the same foreign currency, the capital charge becomes countercyclical.

Date: 2005
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https://doi.org/10.1111/j.0963-8008.2005.00110.x

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Persistent link: https://EconPapers.repec.org/RePEc:wly:finmar:v:14:y:2005:i:5:p:329-348

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