Risk-based capital standards and the riskiness of bank portfolios: credit and factor risks
Article Abstract:
The adjustment of portfolios by banks is governed by risk-based (RBC) capital regulations. Proof to this effect is presented along with a pricing model for loans susceptible to default risk. The model illustrates that the hazards of such loans are guided by the interrelationship of term structure risk, credit risk and market price of factor risk. RBC standards, which emphasize on credit risk, have no discernible effect on decreasing bank risks. Moreover, the efficient measurement of credit risk by RBC standards proves to be futile.
Publication Name: Regional Science & Urban Economics
Subject: Social sciences
ISSN: 0166-0462
Year: 1996
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European monetary union and central bank independence
Article Abstract:
The consequences of European monetary union are examined from the viewpoint that a central European bank can make a large contribution to an improved monetary policy through the induction of price stability. The European monetary union (EMU) must be independent of the political system and fiscal authorities. The future European monetary union must avoid fiscal restraints. Fiscal coordination and centralization are contrary to a low-inflation EMU because they weaken the relative strength and independence of the monetary authority.
Publication Name: Regional Science & Urban Economics
Subject: Social sciences
ISSN: 0166-0462
Year: 1993
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Local public goods and central charities
Article Abstract:
An evaluation of the equilibrium properties defining central charity donations from private institutions shows that exogenous shares for redistribution pull down the volume of public goods voluntarily given. The result assumes aggregate redistribution among regions, which can drop to zero across many regions. An alternative result is by applying a simple allocation process based on minimum information demand and restricted to charities with operations in two or more regions.
Publication Name: Regional Science & Urban Economics
Subject: Social sciences
ISSN: 0166-0462
Year: 1998
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