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Usability of Bank Capital Buffers: The Role of Market Expectations
José AbadAntonio I Garcia Pascual
出版International Monetary Fund, 2022-01-28
主題Business & Economics / Banks & BankingBusiness & Economics / Finance / GeneralBusiness & Economics / Economics / MacroeconomicsBusiness & Economics / Economics / GeneralBusiness & Economics / Industries / Financial ServicesHealth & Fitness / Diseases & Conditions / Contagious (incl. Pandemics)
ISBN16163589399781616358938
URLhttp://books.google.com.hk/books?id=J15jEAAAQBAJ&hl=&source=gbs_api
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註釋Following the COVID shock, supervisors encouraged banks to use capital buffers to support the recovery. However, banks have been reluctant to do so. Provided the market expects a bank to rebuild its buffers, any draw-down will open up a capital shortfall that will weigh on its share price. Therefore, a bank will only decide to use its buffers if the value creation from a larger loan book offsets the costs associated with a capital shortfall. Using market expectations, we calibrate a framework for assessing the usability of buffers. Our results suggest that the cases in which the use of buffers make economic sense are rare in practice.