Assessing the Cost of Financial Regulation

September 26, 2012

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Format: Chicago

Douglas Elliott, and Andre O Santos. Assessing the Cost of Financial Regulation, (USA: International Monetary Fund, 2012) accessed November 21, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

This study assesses the overall impact on credit of the financial regulatory reforms in Europe, Japan, and the United States. Long-term cost estimates are provided for Basel III capital and liquidity requirements, derivatives reforms, and higher taxes and fees. Overall, average lending rates in the base case would rise by 18 bps in Europe, 8 bps in Japan, and 28 bps in the United States. These results are similar to the official BIS assessments of Basel III and an OECD analysis, but lower as a result of including expense cuts and reductions in the returns required by investors. As a result, they are markedly lower than those of the IIF.

Subject: Banking, Basel III, Capital adequacy requirements, Credit, Financial crises, Financial regulation and supervision, Liquidity requirements, Money

Keywords: Bank financials, Bank response, Banks, Basel III, Capital adequacy requirements, Capital ratio, Capital requirement, Cost reduction, Credit, Credit rationing, Equity capital, Europe, Expected return, Financial activity, Financial crisis, Financial Regulation, Fixed income, Global, Interest rate, Liquidity requirements, Market forces, Quantitative analysis, Rate of return, Return on equity, Systemically Important Institutions, WP

Publication Details

Pages:

81
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2012/233
Stock No:

WPIEA2012233
ISBN:

9781475510836
ISSN:

1018-5941

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