Impacts of Capital Adequacy Regulation on Risk-taking Behaviors of Banking

2008 ◽  
Vol 28 (8) ◽  
pp. 183-189 ◽  
Author(s):  
Zong-yi ZHANG ◽  
Jun WU ◽  
Qiong-fang LIU
Keyword(s):  
Risk Taking ◽  
Capital Adequacy ◽  
Risk Taking Behaviors ◽  
Capital Adequacy Regulation

8. Micro-prudential regulation I

2019 ◽  
pp. 329-406
Author(s):  
Iris H-Y Chiu ◽  
Joanna Wilson
Keyword(s):  
Financial Crisis ◽  
Risk Taking ◽  
Global Financial Crisis ◽  
Basel Ii ◽  
Capital Adequacy ◽  
Basel Iii ◽  
Prudential Regulation ◽  
Basel Committee ◽  
The Global Financial Crisis ◽  
Capital Adequacy Regulation

This chapter studies capital adequacy regulation, which prescribes that banks can only take certain levels of risk that are supported by adequate levels of capital. In this way, capital adequacy rules provide a form of assurance that banks with adequate levels of capital are likely able to withstand losses that may result from their risk-taking. The Basel Committee developed its first set of capital adequacy standards in the Basel I Capital Accord of 1988. It was subsequently overhauled into the Basel II Capital Accord in 2003. After the global financial crisis of 2007–9, the Basel II Accord’s shortcomings were extensively discussed and the Basel Committee introduced a package of reforms in order to plug the gaps in Basel II. The Basel III package is the most extensive suite of micro-prudential regulation reforms seen to date, as they deal with capital adequacy and a range of other micro-prudential standards.

Risk-Taking Behaviors in Adolescents

1999 ◽  
Author(s):  
Kristin M. von Ranson ◽  
Susan L. Rosenthal
Keyword(s):  
Risk Taking ◽  
Risk Taking Behaviors

Adolescents’ Future Negative Time Perspective and Risk-Taking Behaviors: The Roles of Coping Styles and Self-Control

2020 ◽  
Author(s):  
Kai Dou ◽  
Ming-Chen Zhang ◽  
Yue Liang
Keyword(s):  
Risk Taking ◽  
Time Perspective ◽  
Longitudinal Design ◽  
Coping Styles ◽  
Future Time Perspective ◽  
Self Control ◽  
Total N ◽  
Negative Coping ◽  
Risk Taking Behaviors ◽  
Negative Time

The association between future time perspective and risk-taking behaviors has received extensive empirical attention. However, the underlying mechanism that links future negative time perspective to risk-taking behaviors are complex and not well-understood. To address this gap, we adopted a longitudinal design examined the association between FNTP and risk-taking behaviors, and the roles of coping styles and self-control in this association among Chinese adolescents (total N = 581, 46.3% females). Results showed that FNTP at wave 1 predicted risk-taking behavior at wave 3 via positive and negative coping styles at wave 2. Furthermore, adolescents with low self-control and used negative coping strategies prefer to engage in risk-taking behaviors as compared to their high self-control counterparts. Taken together, these research findings underscore the importance of considering influence of the future negative time perspective on adolescents’ risk-taking behaviors, and provided important implications for developing the preventions and interventions for reducing adolescents’ risk-taking behaviors.

scholarly journals Capital requirements, risk-taking and welfare in a growing economy

2021 ◽  
Author(s):  
Pierre-Richard Agénor ◽  
Luiz A. Pereira da Silva
Keyword(s):  
Risk Taking ◽  
Default Risk ◽  
Limited Liability ◽  
Capital Requirements ◽  
Optimal Choice ◽  
Capital Adequacy ◽  
Financial Supervision ◽  
Capital Adequacy Ratio ◽  
Monitoring Effort ◽  
Growing Economy

AbstractThe effects of capital requirements on risk-taking and welfare are studied in an overlapping generations model of endogenous growth with banking, limited liability, and government guarantees. Capital producers face a choice between a safe technology and a risky, more productive but socially inefficient, technology. Bank risk-taking is endogenous. As a result of a skin in the game effect—motivated either as an aggregate externality, or as the outcome of the optimal choice of monitoring effort by individual banks—default risk is inversely related to the capital adequacy ratio. Numerical simulations show that in an equilibrium where banks extend both safe and risky loans, the skin in the game effect must be sufficiently strong for a welfare-maximizing regulatory policy to exist. These results remain qualitatively similar with endogenous monitoring costs and a strong effect of monitoring on entrepreneurial moral hazard. However, numerical experiments also suggest that the optimal capital adequacy ratio may be too high in practice and may require concomitantly a broadening of the perimeter of regulation and a strengthening of financial supervision to prevent disintermediation and distortions in financial markets.

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