Financial crises impose large and persistent social costs, making banking stability important.
This article reviews the central issues surrounding the role bank capital plays in financial …

This paper reviews studies exploring how higher bank capital requirements affect economic
growth. There is little evidence of a direct effect; research focuses on the indirect effects of …

Using loan‐level data from Germany, we investigate how the introduction of model‐based
capital regulation affected banks' ability to absorb shocks. The objective of this regulation …

We use a quasi‐experimental research design to examine the effect of model‐based capital
regulation on the procyclicality of bank lending and firms' access to funds. In response to an …

ABSTRACT I develop a structural model of mortgage demand and lender competition to
study how leverage regulation affects the UK mortgage market. Using variation in risk …

The appropriate level of bank capital and, more generally, a bank's capacity to absorb
losses, has been at the core of the post-crisis policy debate. This paper contributes to the …

We use a 2013 Norwegian policy reform to study how banks react to higher capital
requirements and how these adjustments transmit to the real economy. Using bank balance …

We exploit a unique monthly dataset of euro area bank balance sheets to document the
impact of the EBA's 2011/12 Capital Exercise on bank lending. We find that banks in a …

We estimate the shadow cost of capital requirements using data on a costly loophole that
allowed banks to relax these constraints. This loophole—liquidity guarantees to asset …

Minimum equity ratio requirements promote bank stability, but compliance must be
measured credibly and requirements must be commensurate with risk. A mix of higher book …