Macroprudential regulation and bank behaviour: theory and evidence from a quasi-natural experiment

References

• Altunbas, Y., E. Lynne, and P. Molyneux. 2001. Bank ownership and efficiency. Journal of Money, Credit and Banking 33: 926–954. doi:10.2307/2673929
   Web of Science ®Google Scholar
• Basel Committee on Banking Supervision. 2009. Report of the financial stability forum on addressing procyclicality in the financial system. Paper prepared by the Financial Stability Forum (April), BIS, Basel.
   Google Scholar
• Beck, T., H. Hesse, T. Kick, and N.V. Westernhagen. 2009. Bank ownership and stability: Evidence from Germany. Working Paper 22, Deutsche Bundesbank, Germany, Bonn.
   Google Scholar
• Berger, A.N., and D.B. Humphrey. 1997. Efficiency of financial institutions: International survey and directions for future research. European Journal of Operational Research (Special Issue). 98: 175–212. doi:10.1016/S0377-2217(96)00342-6
   Web of Science ®Google Scholar
• Berger, A.N., L.F. Klapper, M.S. Martinez Peria, and R. Zaidi. 2008. Bank ownership type and banking relationships. Journal of Financial Intermediation 17: 37–62. doi:10.1016/j.jfi.2006.11.001
   Web of Science ®Google Scholar
• Berger, A.N., and R. DeYoung. 1997. Problem loans and cost efficiency in commercial banks. Journal of Banking and Finance 21: 849–870. doi:10.1016/S0378-4266(97)00003-4
   Web of Science ®Google Scholar
• Blum, J.M. 2002. Subordinated debt, market discipline and bank’s risk-taking. Journal of Banking and Finance 26: 1427–1441. doi:10.1016/S0378-4266(02)00282-0
   Web of Science ®Google Scholar
• Boyson, N., J. Helwege, and J. Jindra. 2011. Crises, liquidity shocks and fire sales at financial institutions. <http://ssrn.com/abstract=1633042>
   Google Scholar
• Broll, U., G. Schweimayer, and P. Welzel. 2003. Managing credit risk with credit and macro derivatives. Discussion Paper No. 252, University of Augsburg, Germany.
   Google Scholar
• Caruana, J. 2010. Macroprudential policy: Working towards a new consensus. Remarks at the “emerging framework for financial regulation and monetary policy” organised jointly by BIS and IMF (April).
   Google Scholar
• Casu, B., A. Ferrari, and T. Zhao. 2013. Regulatory reform and productivity change in Indian banking. Review of Economics and Statistics 95: 1066–1077. doi:10.1162/REST_a_00298
   Web of Science ®Google Scholar
• Celeska, F., V. Gligorova, and A. Krstevska. 2011. Macroprudential regulation of credit booms and busts – The experience of the National Bank of the Republic of Macedonia. World Bank Policy Research Working Paper 5770, The World Bank, Washington DC.
   Google Scholar
• Cihak, M., and H. Hesse. 2007. Cooperative banks and financial stability. IMF Working Paper 2, IMF, Washington, DC
   Google Scholar
• Claessens, S., S. Ghosh, and R. Mihet. 2013a. Macroprudential policies to mitigate financial system vulnerabilities. In Dealing with the challenges of macrofinancial linkages, eds. O. Canuto and S.R. Ghosh, 155–178. Washington, DC: The World Bank.
   Google Scholar
• Claessens, S., S. Ghosh, and R. Mihet. 2013b. Macroprudential policies to mitigate financial system vulnerabilities. Journal of International Money and Finance 39: 153–185. doi:10.1016/j.jimonfin.2013.06.023
   Web of Science ®Google Scholar
• Cole, S. 2011. Fixing market failures or fixing elections: Agricultural credit in India. American Economic Journal: Applied Economics 1: 219–250.
   Web of Science ®Google Scholar
• Cornett, M., and H. Tehranian. 1994. An examination of voluntary versus involuntary security issuances by commercial banks: The impact of capital regulations on common stock returns. Journal of Financial Economics 35: 99–122. doi:10.1016/0304-405X(94)90019-1
   Web of Science ®Google Scholar
• Cornett, M.M., J.J. McNutt, P.E. Strahan, and H. Tehranian. 2011. Liquidity risk management and credit supply in the financial crisis. Journal of Financial Economics 101: 297–312. doi:10.1016/j.jfineco.2011.03.001
   Web of Science ®Google Scholar
• Cosimano, T., and D. Hakura. 2011. Bank behaviour in response to Basel III: A cross country analysis. IMF Working Paper 119, IMF, Washington DC.
   Google Scholar
• Craig, S., and C. Hua. 2011. Determinants of property prices in Hong Kong SAR: Implications for policy. IMF Working Paper 227, IMF, Washington DC.
   Google Scholar
• Das, A., and S. Ghosh. 2006. Financial deregulation and efficiency: An empirical analysis of Indian banks during the post-reform period. Review of Financial Economics 15: 193–221. doi:10.1016/j.rfe.2005.06.002
   Google Scholar
• Dell’ Ariccia, G., D. Igan, L. Laeven, and H. Tong. 2012. Policies for macrofinancial stability: Options to deal with credit booms. IMF Staff Discussion Note 126, IMF, Washington DC.
   Google Scholar
• Ediz, S., I. Michael, and W. Perraudin. 1998. Bank capital dynamics and regulatory policy. In financial services at the crossroads: Capital regulation in the 21st century. Federal Reserve Bank of New York Conference Volume. FRB New York; New York, pp.19–40.
   Google Scholar
• Estrella, A. 2004. The cyclical behavior of optimal bank capital. Journal of Banking and Finance 28: 1469–1498. doi:10.1016/S0378-4266(03)00130-4
   Web of Science ®Google Scholar
• Gardo, S., and R. Martin. 2010. The impact of the global economic and financial crisis on Central, Eastern and South-Eastern Europe: A stock-taking exercise. European Central Bank Occasional Paper No. 115, ECB, Frankfurt.
   Google Scholar
• Ghosh, S., D.M. Nachane, A. Narain, and S. Sahoo. 2003. Capital requirements and bank behaviour: An empirical analysis of Indian public sector banks. Journal of International Development 15: 145–156. doi:10.1002/jid.947
   Google Scholar
• Gormley, T. 2010. The impact of foreign bank entry in emerging markets: Evidence from India. Journal of Financial Intermediation 19: 26–51. doi:10.1016/j.jfi.2009.01.003
   Web of Science ®Google Scholar
• Honohan, P. 2008. Cross-country variation in household access to financial services. Journal of Banking and Finance 32: 2493–2500. doi:10.1016/j.jbankfin.2008.05.004
   Web of Science ®Google Scholar
• Huang, R. 2010. How committed are bank lines of credit? Experiences in the subprime mortgage crisis. Federal Reserve Bank of Philadelphia Working Paper No. 25, Philadelphia, PA.
   Google Scholar
• Igan, D., and H. Kang. 2011. Do loan-to-value and debt-to-income limits work? Evidence from Korea. IMF Working Paper 297, IMF, Washington DC
   Google Scholar
• International Monetary Fund. 2010. Impact of the global financial crisis on the Gulf Cooperation Countries and challenges ahead. Prepared by a team led by M. Khamis and A. Senhadji and comprising M. Hasan, F. Kumah, A. Prasad and G. Sensenbrenner, IMF, Washington DC.
   Google Scholar
• International Monetary Fund. 2012. The interaction of monetary and macroprudential policies. Background Paper, IMF, Washington DC.
   Google Scholar
• Ivashina, V., and D. Scharfstein. 2010. Bank lending during the financial crisis of 2008. Journal of Financial Economics 97: 319–338. doi:10.1016/j.jfineco.2009.12.001
   Web of Science ®Google Scholar
• Jimenez, G., S.R.G. Ongena, J.-L. Pedro, and J. Saurina. 2012. Macroprudential policy, countercyclical bank capital buffers and credit supply: Evidence from the Spanish dynamic provisioning experiments. European Banking Centre Discussion Paper No. 11, Netherlands.
   Google Scholar
• Kenc, T., M. Turhan, and O. Yildrim. 2011. The experience with macroprudential policies of the Central Bank of the Republic of Turkey in response to the global financial crisis. World Bank Policy Research Working Paper 5834, The World Bank, Washington DC.
   Google Scholar
• Kopecky, K., and D. Van Hoose. 2004a. A model of the monetary sector with and without binding capital requirements. Journal of Banking and Finance 28: 633–646. doi:10.1016/S0378-4266(03)00038-4
   Web of Science ®Google Scholar
• Kopecky, K., and D. Van Hoose. 2004b. Bank capital requirements and the monetary transmission mechanism. Journal of Macroeconomics 26: 443–464. doi:10.1016/j.jmacro.2003.03.002
   Web of Science ®Google Scholar
• Kraft, E., and T. Galac. 2011. Macroprudential regulation of credit booms and busts – The case of Croatia. World Bank Policy Research Working Paper 5832, The World Bank, Washington, DC.
   Google Scholar
• Kumbhakar, S.C., and S. Sarkar. 2003. Deregulation, ownership and productivity growth in the banking industry: Evidence from India. Journal of Money, Credit, and Banking 35: 403–424. doi:10.1353/mcb.2003.0020
   Web of Science ®Google Scholar
• Lim, C., F. Columba, A. Costa, P. Kongsamut, A. Otani, M. Saiyid, T. Wezel, and X. Wu. 2011. Macroprudential policy: What instruments and how to use them? Lessons from country experiences. IMF Working Paper 238, IMF, Washington, DC.
   Google Scholar
• Louis, K., N. Leonce, and R. Taoufik. 2009. Impact of the global financial and economic crisis on Africa. African Development Bank Working Paper No. 96, African Development Bank, Tunisia.
   Google Scholar
• Mukherjee, K., S.C. Ray, and S.M. Miller. 2001. Productivity growth in large US commercial banks: The initial post-deregulation experience. Journal of Banking and Finance 25: 913–939. doi:10.1016/S0378-4266(00)00103-5
   Web of Science ®Google Scholar
• Murinde, V., and H. Yaseen. 2006. The impact of the Basel accord regulations on bank capital and risk behaviour: 3D evidence from MENA region. Working Paper 22, University of Birmingham, UK.
   Google Scholar
• Pausch, T., and P. Welzel. 2012. Regulation, credit risk transfer with CDS and bank lending. Discussion Paper No.5, Deutsche Bundesbank, Germany.
   Google Scholar
• Rajan, R.G. 1992. Insiders and outsiders: The choice between informed and arms’ length debt. The Journal of Finance 47: 1367–1400. doi:10.1111/j.1540-6261.1992.tb04662.x
   Web of Science ®Google Scholar
• Ree, J.J.K. 2011. Impact of the global crisis on banking sector soundness in Asian low-income countries. IMF Working Paper No. 115, IMF, Washington, DC.
   Google Scholar
• RBI. 2011. Handbook of statistics on Indian economy. Mumbai: RBI.
   Google Scholar
• Rime, B. 2001. Capital requirements and bank behaviour: Empirical evidence for Switzerland. Journal of Banking and Finance 25: 789–805. doi:10.1016/S0378-4266(00)00105-9
   Web of Science ®Google Scholar
• Rodrik, D. 2012. Why we learn nothing from regressing economic growth on policies. Seoul Journal of Economics 25: 137–151.
   Google Scholar
• Shrieves, R.E., and D. Dahl. 1992. The relationship between risk and capital in commercial banks. Journal of Banking and Finance 16: 439–457.
   Google Scholar
• Stein, J.C. 1998. An adverse selection model of bank asset liability management with implications for transmission of monetary policy. The RAND Journal of Economics 29: 466–486. doi:10.2307/2556100
   Web of Science ®Google Scholar
• Stolz, S. 2007. Bank capital and risk-taking. New York, NY: Springer-Verlag.
   Google Scholar
• Subbarao, D. 2009. Banking structure in India: Looking ahead by looking back. Speaking notes at the FICCI-IBA Annual banking conference in Mumbai, August.
   Google Scholar
• Sutt, A., H. Korju, and K. Siibak. 2011. The role of macroprudential policies in the boom and adjustment phase of the credit cycle in Estonia. World Bank Policy Research Working Paper 5835, The World Bank, Washington, DC.
   Google Scholar
• Tovar, C., M. Garcia-Escribnos, and M. Vera Martin. 2012. Credit growth and the effectiveness of reserve requirements and other macroprudential instruments in Latin America. IMF Working Paper 142, IMF, Washington, DC.
   Google Scholar
• Van Roy, P. 2008. Capital requirements and bank behaviour in the early 1990s: Cross-country evidence. International Journal of Central Banking 4: 29–60.
   Web of Science ®Google Scholar
• Vandenbussche, J., U. Vogel, and E. Detragiache. 2012. Macroprudential policies and housing prices – A new database and empirical evidence for Central, Eastern and South eastern Europe. IMF Working Paper 303, IMF, Washington, DC.
   Google Scholar
• Wheelock, D.C., and P.W. Wilson 1999. Technical progress, efficiency and productivity change in US banking: 1984-1993. Journal of Money, Credit and Banking 24: 39–52.
   Google Scholar
• Wong, E., T. Fong, K.-F. Li, and H. Choi. 2011. Loan-to-value ratio as a macroprudential tool: Hong Kong’s experience and cross-country evidence. Hong Kong Monetary Authority Working Paper 1.
   Google Scholar
• Wong, K.P. 1997. On the determinants of bank interest margins under credit and interest rate risks. Journal of Banking and Finance 21: 251–271. doi:10.1016/S0378-4266(96)00037-4
   Web of Science ®Google Scholar
• Zhao, T., B. Casu, and A. Ferrari. 2010. The impact of regulatory reforms on cost structure, ownership and competition in Indian banking. Journal of Banking and Finance 34: 246–254. doi:10.1016/j.jbankfin.2009.07.022
   Web of Science ®Google Scholar