Monetary Policy with a Touch of Basel

Chami, Ralph; Cosimano, Thomas F.

doi:10.2139/ssrn.278655

Cited by 74 publications

(86 citation statements)

References 90 publications

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“…As this decision is influence by interest rates, this gives rise to another channel of monetary policy. This channel has also been identified by Chami and Cosimano (2001) and van der Heuvel (2001). Unlike these papers, we do not require explicit asymmetric information, market power in the banking industry or increasing marginal cost of financing.…”

Section: Resultssupporting

confidence: 58%

Basel Accord and Financial Intermediation: The Impact of Policy

Berka

Zimmermann

2011

SSRN Journal

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This paper studies loan activity in a context where banks have to follow Basel Accord type rules and need to find financing with the households. Loan activity typically decreases when investment returns of entrepreneurs decline, and we study which type of policy could revigorate an economy in a trough. We find that active monetary policy increases loan volume even when the economy is in a good shape, while introducing active capital requirement policy can be effective as well if it implies tightening of regulation in bad times. This is performed with an heterogeneous agent economy with occupational choice, financial intermediation and aggregate shocks to the distribution of entrepreneurial returns.

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Section: Resultssupporting

confidence: 58%

Basel Accord and Financial Intermediation: The Impact of Policy

Berka

Zimmermann

2011

SSRN Journal

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“…This may lead to observing a higher overall banking cost in the economy. A 'bank balance sheet' channel for monetary policy through which the central bank can influence the loan decision of banks, was identified by Chami and Cosimano (2010). Through this channel the central bank may influence the bank's cost functions and ultimately, the decisions of the agent to deposit or evade.…”

Section: Datamentioning

confidence: 99%

Tax evasion, financial development and inflation: Theory and empirical evidence

Bittencourt

Gupta

Stander

2014

Journal of Banking & Finance

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Using a standard overlapping generations monetary production economy, faced with endogenously determined tax evasion by heterogeneous agents in the economy, we provide a theoretical model that indicates that both a lower (higher) level of financial development and a higher (lower) level of inflation leads to a bigger (smaller) shadow economy. These findings are empirically tested within a panel econometric framework, using data collected for 150 countries over the period 1980−2009 to enable a broad generalisation of the results. The results support the developed theoretical model, even after having accounted for the differences in the levels of economic development, the level of institutional quality that includes different tax regimes and regulatory frameworks, central bank participation in the economy as well as different macroeconomic policies.JEL Classification: C61, E26, P16 Keywords: Informal economy, financial development, inflation. * We would like to thank two anonymous referees for many helpful comments that tremendously improved the quality of the paper. However, any remaining errors are solely ours.

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“…We expect that in the presence of minimum capital requirements, large unexpected write-downs limit subsequent lending if these capital requirements are binding (Peek and Rosengren, 1995) or expected to become binding (Ralph Chami and Thomas F. Cosimano, 2010).…”

Section: A Datamentioning

confidence: 99%

International Shock Transmission after the Lehman Brothers Collapse: Evidence from Syndicated Lending

Haas

Horen

2012

American Economic Review

215

100

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After Lehman Brothers filed for bankruptcy in September 2008, cross-border bank lending contracted sharply. To explain the severity and variation in this contraction, we analyze detailed data on cross-border syndicated lending by 75 banks to 59 countries. We find that banks that had to write down sub-prime assets, refinance large amounts of long-term debt, and experienced sharp declines in their market-to-book ratio, transmitted these shocks across borders by curtailing their lending abroad. While shocked banks differentiated between countries in much the same way as less constrained banks, they restricted their lending more to small borrowers.

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Monetary Policy with a Touch of Basel

Cited by 74 publications

References 90 publications

Basel Accord and Financial Intermediation: The Impact of Policy

Basel Accord and Financial Intermediation: The Impact of Policy

Tax evasion, financial development and inflation: Theory and empirical evidence

International Shock Transmission after the Lehman Brothers Collapse: Evidence from Syndicated Lending

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