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Author
Gersbach, Hans
Papageorgiou, Stylianos
Date
2019-01Type
- Working Paper
ETH Bibliography
yes
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Abstract
We study the political economy of bank capital regulation from a positive and normative perspective. In a general equilibrium setting, capital requirements and lobbying contributions are determined as the outcome of bargaining between banks and politicians. We show that bankers and politicians
agree on lobbying contributions and capital regulation that renders banks fragile, reducing efficiency and fairness. Consideration of all general equilibrium effects, or a bail-in provision and high capital regulation standards from international agreements eliminate lobbying incentives, yielding an efficient and fair allocation Show more
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https://doi.org/10.3929/ethz-b-000316298Publication status
publishedExternal links
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Journal / series
Economics Working Paper SeriesVolume
Publisher
CER-ETH – Center of Economic Research at ETH ZurichSubject
banking regulation; lobbying; regulatory capture; capital requirements; bank resolution; risk-takingOrganisational unit
02120 - Dep. Management, Technologie und Ökon. / Dep. of Management, Technology, and Ec.
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ETH Bibliography
yes
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