The jury is in
CEPR Policy Insight No 76
Regulators forced up capital requirements up after the Global Crisis – triggering fears in the industry of dire effects. CEPR Policy Insight 76 – by former BIS Chief Economist Steve Cecchetti – argues that the capital increases had little impact on anything but bank profitability. Lending spreads and interest margins are nearly unchanged, while credit growth remains robust everywhere but in Europe. Perhaps the requirements should be raised further.