2016•RePEc: Research Papers in EconomicsOpen access

Bank Lending Behavior and the Business Cycle Under Basel Regulations: Is There a Significant Procyclicality?

Katsutoshi Shimizu, Kim Cuong Ly

Abstract

This paper re-examines the procyclical effect of risk{sensitive capital regulation on bank lending. The risk{sensitive requirement of the Basel II/III regulation affects procyclically the bank lending in European countries, but the actual requirements are indeed too risk-insensitive. However, the risk{sensitive capital regulation induces less lending than the risk-insensitive capital regulation. Furthermore, the introduction of Basel II has a negative impact on lending even under the risk{insensitive regulation.

About this research paper

What this paper is about

Why it matters

A significance statement is not available in the OpenAlex record.

Key contribution

A contribution statement is not available in the OpenAlex record.

Method / approach

Method details are not available in the OpenAlex metadata.

Main findings

Findings are not separately available in the OpenAlex metadata.

Limitations

Limitations are not available in the OpenAlex metadata.

Applications

Application details are not available in the OpenAlex metadata.

Available abstract

Key concepts: Capital requirement, Risk-weighted asset, Basel II, Basel III, Basel I, Bank regulation, Risk-adjusted return on capital, Capital (architecture)