Literature Review on Integration of Regulatory Capital and Liquidity Instruments
Bank for International Settlements
Download Document| Date Published | March 2016 |
| Version | |
| Primary Author | Basel Committee on Banking Supervision |
| Other Authors | |
| Theme | Housing Finance Policy |
| Country |
Abstract
This working paper aims at reviewing the literature’s assessment of recent reforms. It consists of “three essays” on capital (Section 2), on liquidity and its interaction with capital (Section 3) and on other supervisory requirements (Section 4). Although there are many studies on the effects of capital requirements, there are relatively few on the effects of liquidity requirements and other supervisory tools. In part, this is because capital requirements have been in place for a considerable time and over more than one business cycle, while liquidity requirements and other supervisory tools, such as buffers, macroprudential policies and stress tests, have only been implemented since the recent financial crisis.