Publication
Feb 2002
This paper furnishes a literature review on the relationship between bank capital requirements, risk-taking and capital regulations. It notes that limited liability and deposit insurance give banks incentives for excessive risk-taking. Capital requirements can alleviate this problem, as banks are obliged to hold more capital and put more of their own funds at risk. The paper surveys both the theoretical and empirical literature, and outlines implications for subsequent research.
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English (PDF, 34 pages, 370 KB) |
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Author | Stéphanie Stolz |
Series | Kiel Institute Working Papers |
Issue | 1105 |
Publisher | Kiel Institute for the World Economy |
Copyright | © 2002 Kiel Institute for the World Economy |