Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/194131
Authors: 
Gersbach, Hans
Papageorgiou, Stylianos
Year of Publication: 
2019
Series/Report no.: 
Economics Working Paper Series 19/308
Abstract: 
We study the political economy of bank capital regulation from a positive and normative perspective. In a general equilibrium setting, capital requirements and lobbying contributions are determined as the outcome of bargaining between banks and politicians. We show that bankers and politicians agree on lobbying contributions and capital regulation that renders banks fragile, reducing efficiency and fairness. Consideration of all general equilibrium effects, or a bail-in provision and high capital regulation standards from international agreements eliminate lobbying incentives, yielding an efficient and fair allocation.
Subjects: 
Banking regulation
lobbying
regulatory capture
capital requirements
bank resolution
risk-taking
JEL: 
D53
D72
G21
G28
Persistent Identifier of the first edition: 
Document Type: 
Working Paper
Social Media Mentions:

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.