The Right Balance for Banks: Theory and Evidence on Optimal Capital Requirements (Policy Analyses in International Economics ; 107)

William R. Cline

ISBN 10: 0881327212 / ISBN 13: 9780881327212

Published by Peterson Institute for International Economics, 2017

About this Item

Inscribed on the title page by the author ("Bill") to a Harvard economist. Top outer edge has a small area of light soil; binding has some wear; tight, text clean. xiii, [1], 241, [24] p. [otob: 20a].

Seller Inventory # 207593

Bibliographic Details

• Title: The Right Balance for Banks: Theory and Evidence on Optimal Capital Requirements (Policy Analyses in International Economics ; 107)
• Publisher: Peterson Institute for International Economics
• Publication Date: 2017
• Language: English
• ISBN 10: 0881327212
• ISBN 13: 9780881327212
• Binding: Trade Paperback
• Edition: First Printing.
• Condition: Very Good-
• Signed: Inscribed By Author to Prominent Person

About this title

Synopsis

The global financial crisis produced an important agreement among regulators in 2010–11 to raise capital requirements for banks to protect them from insolvency in the event of another emergency. In this book, William R. Cline, a leading expert on the global financial system, employs sophisticated economic models to analyze whether these reforms, embodied in the Third Basel Accord, have gone far enough. He calculates how much higher bank capital reduces the risk of banking crises, providing a benefit to the economy. On the cost side, he estimates how much higher capital requirements raise the lending rate facing firms, reducing investment in plant and equipment and thus reducing output in the economy. Applying a plausible range of parameters, Cline arrives at estimates for the optimal level of equity capital relative to total bank assets. This study also challenges the recent "too much finance" literature, which holds that in advanced countries banking sectors are already too large and are curbing growth.

About the Author

William R. Cline has been a senior fellow at the Peterson Institute for International Economics since 1981. During 1996–2001, Cline was deputy managing director and chief economist of the Institute of International Finance in Washington, DC. From 2002 through 2011, he held a joint appointment with the Peterson Institute and the Center for Global Development, where he is currently senior fellow emeritus.