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SFB 649 Discussion Papers, HU Berlin >
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http://hdl.handle.net/10419/39333
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| Title: | | Liquidity and capital requirements and the probability of bank failure  |
| Authors: | | König, Philipp Johann |
| Issue Date: | | 2010 |
| Series/Report no.: | | SFB 649 discussion paper 2010,027 |
| Abstract: | | Using the model of Rochet and Vives (2004), this note shows that a prudential regulator can in general not mitigate a bank's failure risk solely by means of liquidity requirements. However, their effectiveness can be restored if, in addition, minimum capital requirements are met. This provides a rationale for capital requirements beyond the commonly envoked reasoning that they are to be used to control the riskiness of banks' asset portfolios. |
| Subjects: | | prudential regulation liquidity requirements minimum capital requirements global games |
| JEL: | | G21 G28 |
| Document Type: | | Working Paper |
| Appears in Collections: | | SFB 649 Discussion Papers, HU Berlin
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