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

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Giesecke, James A ORCID: 0000-0002-7283-0551, Dixon, Peter and Rimmer, Maureen T (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


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.

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"Special issue"

Item type Article
DOI 10.1111/1475-4932.12341
Official URL
Subjects Historical > FOR Classification > 1402 Applied Economics
Historical > FOR Classification > 1502 Banking, Finance and Investment
Historical > FOR Classification > 1503 Business and Management
Historical > Faculty/School/Research Centre/Department > College of Business
Keywords finance; macroeconomics; economics; financial system resilience
Citations in Scopus 6 - View on Scopus
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