An Additional capital requirements based on the domestic systemic importance of a bank

Michal Skořepa () and Jakub Seidler

Chapter Thematic Article 1 in CNB Financial Stability Report 2012/2013, 2013, pp 96-102 from Czech National Bank, Research and Statistics Department

Abstract: This article is concerned with the regulation of banks on the basis of theirdifferent degrees of systemic importance. It proposes a specific approach to calculating a bank's systemic importance to the domestic banking sector. The article goes on to propose a method for assessing the additional capital requirement for a bank based on the estimated cost impacts of failure of the bank on the Czech financial sector and the economy as a whole. The proposed approach is used to obtain systemic importance scores and capital buffers for individual banks in the Czech Republic. According to the calculations, the highest capital buffer is 4%. However, a non-zero capital buffer should not be interpreted as a signal that the bank is too big to fail and would therefore be guaranteed a public bail-out if it got into difficulties.

Date: 2013
ISBN: 978-80-87225-44-8
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

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Persistent link: https://EconPapers.repec.org/RePEc:cnb:ocpubc:fsr1213/1

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