We investigate how provisioning models interact with bank regulation to affect banks' risk-taking behavior. study an accuracy versus timeliness trade-off between incurred loss model (IL) and expected (EL) such as current credit or International Financial Reporting Standards 9. Relative IL, even though EL improves efficiency by prompting earlier corrective action in bad times, it induces banks o...

Traditional monetary theory has largely ignored the role of bank equity. Bank-centred accounts of how monetary policy affects the real economy usually focus on the role of reserves and reserve requirements in determining the volume of demand deposits and, in the case of the bank lending channel, bank loans. As Benjamin Friedman (1991) observed, “Traditionally, most economists have regarded the ...

This paper investigates the role of banking supervision in controlling bank risk. Banking supervision is measured in terms of enforcement outputs (i.e., on-site audits and sanctions). Our results show an inverted U-shaped relationship between on-site audits and bank risk, while the relationship between sanctions and risk appears to be linear and negative. We also consider the combined effect of...

Traditional monetary theory has largely ignored the role of bank equity. Bank-centred accounts of how monetary policy affects the real economy usually focus on the role of reserves and reserve requirements in determining the volume of demand deposits and, in the case of the bank lending channel, bank loans. As Benjamin Friedman (1991) observed, “Traditionally, most economists have regarded the ...

The credit hypothesis maintains that nonmonetary factors worsen declines in output during severe economic contractions, which has been a prominent rationale for stringent bank regulation. We apply recent advances in time series analysis to re-examine the role of U.S. bank failures in the Great Depression. In brief, month-by-month decompositions of output, prices, money supply, the liabilities o...

The exchange of foreign currency to rupiah or vice versa in Indonesia can be carried out by the public commercial banks non - business entities commonly called as money changer non-bank traders. activities traders (KUPVA BB) general thrive areas which economy, tourism are growing and area that is being origin Indonesian workers working abroad. purpose writing this paper study legal basis regula...

Abstract We study today’s two-tier money creation and destruction system: Commercial banks create bank deposits (privately created money) through loans to firms or asset purchases from the private sector. Bank are destroyed when households buy equity repay loans. Central electronic central (publicly reserves) commercial banks. In a simple general equilibrium setting, we show that symmetric equi...

following changes in economic fields, monetary transmission mechanism has been equipped with different approaches. for example, introducing and then applying the first draft of basel committee’s capital requirement has portrayed new horizon in the monetary transmission mechanism discussions. while as the first step, it has been emphasized on the static role of bank’s capital; as the second step...