Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/127992
Authors: 
Rime, Bertrand
Year of Publication: 
2000
Series/Report no.: 
Working Paper, Study Center Gerzensee 00.05
Abstract: 
In recent years, regulators have increased their focus on the capital adequacy of banking institutions to enhance the stability of the financial system. The purpose of the present paper is to shed some light on whether and how Swiss Banks react to constraints placed by the regulator on their capital. Building on previous work by Shrieves and Dahl (1992), we use a simultaneous equations model to analyse adjustments in capital and risk at Swiss banks, when those approach the minimum regulatory capital level. Our results indicate that regulatory pressure induce banks to increase their capital, but does not affect the level of risk.
Subjects: 
Risk-based capital
Capital ratios
Portfolio risk
JEL: 
G21
G28
Document Type: 
Working Paper

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