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The Economy-wide Impacts of a Rise in the Capital Adequacy Ratios of Australian Banks

Giesecke, James A ORCID: 0000-0002-7283-0551, Dixon, Peter and Rimmer, Maureen (2017) The Economy-wide Impacts of a Rise in the Capital Adequacy Ratios of Australian Banks. Economic Record, 93 (Supp S1). 16 - 37. ISSN 0013-0249

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Abstract

Regulators are requiring banks to raise additional equity to finance their activities. The benefits are understood in terms of reducing the risks of another financial crisis. But there are potential costs, including the potential for unanticipated macroeconomic impacts as banks reduce leverage. We use a financial computable general equilibrium model, containing disaggregated treatment of financial agents, to explore the economy-wide consequences of an increase in bank capital adequacy ratios. We find that the macroeconomic consequences are small.

Item Type: Article
Additional Information:

"Special issue"

Uncontrolled Keywords: finance; macroeconomics; economics; financial system resilience
Subjects: FOR Classification > 1402 Applied Economics
FOR Classification > 1502 Banking, Finance and Investment
FOR Classification > 1503 Business and Management
Faculty/School/Research Centre/Department > College of Business
Depositing User: Symplectic Elements
Date Deposited: 16 Jan 2018 22:50
Last Modified: 10 May 2019 05:11
URI: http://vuir.vu.edu.au/id/eprint/35372
DOI: https://doi.org/10.1111/1475-4932.12341
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Citations in Scopus: 0 - View on Scopus

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