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Two-period model of Bank lending channel: Basel II regulatory constraints

This paper predicts the dynamic model of the bank lending channel under Basel II regulatory constraints with monopolistic competition. The two-period model is chosen in order to demonstrate the effects of new Basel capital constraints on the risks of banks assets during both periods; and the amoun...

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Main Author: Fathin Faizah Said,
Format: Article
Language:English
Published: Penerbit Universiti Kebangsaan Malaysia 2014
Online Access:http://journalarticle.ukm.my/8408/1/jeko_48%281%29-8.pdf
http://journalarticle.ukm.my/8408/
http://www.ukm.my/fep/jem/index.html
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spelling my-ukm.journal.84082016-12-14T06:47:08Z http://journalarticle.ukm.my/8408/ Two-period model of Bank lending channel: Basel II regulatory constraints Fathin Faizah Said, This paper predicts the dynamic model of the bank lending channel under Basel II regulatory constraints with monopolistic competition. The two-period model is chosen in order to demonstrate the effects of new Basel capital constraints on the risks of banks assets during both periods; and the amount of equity in the second period. The prediction of period one and two are shown to have the same effect and the only difference is the constraint. The regulatory constraint in periods one and two are predicted depending on the regulatory parameters and constraints for both periods. Thus, the effect of optimal rates on a policy rate is felt greater or less during the first period than during the second period, which means tightening capital requirements increases or decreases the risks of assets and banks taking higher or lower risks, respectively,during the first period than during the second period. Penerbit Universiti Kebangsaan Malaysia 2014 Article PeerReviewed application/pdf en http://journalarticle.ukm.my/8408/1/jeko_48%281%29-8.pdf Fathin Faizah Said, (2014) Two-period model of Bank lending channel: Basel II regulatory constraints. Jurnal Ekonomi Malaysia, 48 (1). pp. 87-97. ISSN 0127-1962 http://www.ukm.my/fep/jem/index.html
institution Universiti Kebangsaan Malaysia
building Perpustakaan Tun Sri Lanang Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Kebangsaan Malaysia
content_source UKM Journal Article Repository
url_provider http://journalarticle.ukm.my/
language English
description This paper predicts the dynamic model of the bank lending channel under Basel II regulatory constraints with monopolistic competition. The two-period model is chosen in order to demonstrate the effects of new Basel capital constraints on the risks of banks assets during both periods; and the amount of equity in the second period. The prediction of period one and two are shown to have the same effect and the only difference is the constraint. The regulatory constraint in periods one and two are predicted depending on the regulatory parameters and constraints for both periods. Thus, the effect of optimal rates on a policy rate is felt greater or less during the first period than during the second period, which means tightening capital requirements increases or decreases the risks of assets and banks taking higher or lower risks, respectively,during the first period than during the second period.
format Article
author Fathin Faizah Said,
spellingShingle Fathin Faizah Said,
Two-period model of Bank lending channel: Basel II regulatory constraints
author_facet Fathin Faizah Said,
author_sort Fathin Faizah Said,
title Two-period model of Bank lending channel: Basel II regulatory constraints
title_short Two-period model of Bank lending channel: Basel II regulatory constraints
title_full Two-period model of Bank lending channel: Basel II regulatory constraints
title_fullStr Two-period model of Bank lending channel: Basel II regulatory constraints
title_full_unstemmed Two-period model of Bank lending channel: Basel II regulatory constraints
title_sort two-period model of bank lending channel: basel ii regulatory constraints
publisher Penerbit Universiti Kebangsaan Malaysia
publishDate 2014
url http://journalarticle.ukm.my/8408/1/jeko_48%281%29-8.pdf
http://journalarticle.ukm.my/8408/
http://www.ukm.my/fep/jem/index.html
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score 13.211869

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