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Optimal equity capital requirements for large Swiss banks

Junge, Georg and Kugler, Peter. (2018) Optimal equity capital requirements for large Swiss banks. Swiss Journal of Economics and Statistics / Schweizerische Zeitschrift für Volkswirtschaft und Statistik, 154 (22). pp. 1-21.

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Official URL: https://edoc.unibas.ch/68478/

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Abstract

Ten years after the worst financial crisis of the post-war period, Switzerland has established a Too-Big-To-Fail (TBTF) framework. Under this framework, the two large Swiss banks are subject to substantial capital requirements. It is not obvious whether the TBTF capital requirements are sufficient to prevent banks from plunging the country into a financial crisis once again. We estimate the social costs and benefits of higher capital requirements for the two large Swiss banks and derive socially optimal capital ratios from the cost-benefit trade-off. Our results show that Swiss TBTF capital requirements still fall short of socially optimal capital ratios.
Faculties and Departments:06 Faculty of Business and Economics
06 Faculty of Business and Economics > Departement Wirtschaftswissenschaften
06 Faculty of Business and Economics > Departement Wirtschaftswissenschaften > Professuren Wirtschaftswissenschaften > Geld- und Währungsgeschichte (Kugler)
UniBasel Contributors:Kugler, Peter
Item Type:Article, refereed
Article Subtype:Research Article
Publisher:Swiss Society of Economics and Statistics (SSES)
ISSN:0303-9692
e-ISSN:2235-6282
Note:Publication type according to Uni Basel Research Database: Journal article
Identification Number:
Last Modified:17 Jan 2019 14:29
Deposited On:17 Jan 2019 14:29

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