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/ http://journalarticle.ukm.my/8408/ http://journalarticle.ukm.my/8408/1/jeko_48%281%29-8.pdf

id	ukm-8408
recordtype	eprints
spelling	ukm-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
repository_type	Digital Repository
institution_category	Local University
institution	Universiti Kebangasaan Malaysia
building	UKM Institutional Repository
collection	Online Access
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/ http://journalarticle.ukm.my/8408/ http://journalarticle.ukm.my/8408/1/jeko_48%281%29-8.pdf
first_indexed	2023-09-18T19:52:17Z
last_indexed	2023-09-18T19:52:17Z
_version_	1777406299651178496

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

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