Bank capital regulation: are local or central regulators better?

Carole Haritchabalet (), Laetitia Lepetit, Kévin Spinassou and Frank Strobel
Additional contact information
Carole Haritchabalet: CATT - Centre d'Analyse Théorique et de Traitement des données économiques - UPPA - Université de Pau et des Pays de l'Adour
Laetitia Lepetit: LAPE - Laboratoire d'Analyse et de Prospective Economique - GIO - Gouvernance des Institutions et des Organisations - UNILIM - Université de Limoges
Kévin Spinassou: LAPE - Laboratoire d'Analyse et de Prospective Economique - GIO - Gouvernance des Institutions et des Organisations - UNILIM - Université de Limoges

Post-Print from HAL

Abstract: Using a simple two-region model where local or central regulators set capital requirements as risk sensitive capital or leverage ratios, we demonstrate the importance of capital requirements being set centrally when cross-region spillovers are arge and local regulators suffer from substantial regulatory capture. We show that local regulators may want to surrender regulatory power only when spillover effects are large but the degree of supervisory capture is relatively small, and that capital regulation at central rather than local levels is more benefcial the larger the impact of systemic risk and the more asymmetric is regulatory capture at the local level.

Keywords: bank regulation; capital requirement; spillover; regulatory capture; financial architecture (search for similar items in EconPapers)
Date: 2015-10-14
Note: View the original document on HAL open archive server: https://univ-pau.hal.science/hal-02440532v1
References: View references in EconPapers View complete reference list from CitEc
Citations:

Published in FMA Annual Meeting, Oct 2015, Orlando, United States

Downloads: (external link)
https://univ-pau.hal.science/hal-02440532v1/document (application/pdf)

Related works:
Journal Article: Bank capital regulation: Are local or central regulators better? (2017)
Working Paper: Bank capital regulation: are local or central regulators better? (2017)
Working Paper: Bank capital regulation: are local or central regulators better? (2016)
Working Paper: Bank capital regulation: are local or central regulators better? (2016)
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: https://EconPapers.repec.org/RePEc:hal:journl:hal-02440532

Access Statistics for this paper

More papers in Post-Print from HAL
Bibliographic data for series maintained by CCSD ().