The Countercyclical Capital Buffer of Basel III: A Critical Assessment

Preprint OPEN
Repullo, Rafael; Saurina, Jesús;
(2011)
  • Subject: Bank capital regulation; Basel III; Business cycles; Credit crunch; Pro-cyclicality
    • jel: jel:E32 | jel:G28

We provide a critical assessment of the countercyclical capital buffer in the new regulatory framework known as Basel III, which is based on the deviation of the credit-to-GDP ratio with respect to its trend. We argue that a mechanical application of the buffer would te... View more
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