Benefits and Costs of Bank Capital
Giovanni Dell'ariccia (),
Luc Laeven (),
Lev Ratnovski () and
No 16/04, IMF Staff Discussion Notes from International Monetary Fund
The appropriate level of bank capital and, more generally, a bank’s capacity to absorb losses, has been at the core of the post-crisis policy debate. This paper contributes to the debate by focusing on how much capital would have been needed to avoid imposing losses on bank creditors or resorting to public recapitalizations of banks in past banking crises. The paper also looks at the welfare costs of tighter capital regulation by reviewing the evidence on its potential impact on bank credit and lending rates. Its findings broadly support the range of loss absorbency suggested by the Financial Stability Board (FSB) and the Basel Committee for systemically important banks.
Keywords: Bank capital; Cost of capital; United States; Banking crisis; Capital requirements; Risk management; General equilibrium models; Bank Capital, TLAC, Financial Regulation, bank, capital, banks, capital requirements, General, All Countries, (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ban and nep-rmg
References: Add references at CitEc
Citations: View citations in EconPapers (21) Track citations by RSS feed
Downloads: (external link)
Our link check indicates that this URL is bad, the error code is: 403 Forbidden
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:imf:imfsdn:16/04
Ordering information: This working paper can be ordered from
Access Statistics for this paper
More papers in IMF Staff Discussion Notes from International Monetary Fund International Monetary Fund, Washington, DC USA. Contact information at EDIRC.
Bibliographic data for series maintained by Jim Beardow ().