Discussion paper

DP9348 Capital, Trust and Competitiveness in the Banking Sector

This note critically assesses the Basel reform process of capital regulation. It highlights the political nature of this process and argues that the absence of clearly spelled-out societal objectives has been detrimental in furthering stability and soundness of the banking systems in the run-up of the 2007/8 financial crisis. The positive externalities of bank capital have not hitherto been explicitly been taken into consideration.

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Citation

Gehrig, T (2013), ‘DP9348 Capital, Trust and Competitiveness in the Banking Sector‘, CEPR Discussion Paper No. 9348. CEPR Press, Paris & London. https://cepr.org/publications/dp9348