Bank Interest Margin and Default Risk under Basel III Capped Capital Adequacy Accord and Regulatory Deposit Insurance Fund Protection

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Chuen-Ping Chang; Shi Chen;
  • Journal: International Journal of Financial Research,volume 6,issue 1 January,pages14-21
  • Subject: Basel III, deposit insurance fund, government capital injection, bank interest margin, default risk

We study the optimal bank interest margin and default risk under the capped ratio schedule of government capital instruments in the Basel III Capital Adequacy Accord and the Deposit Insurance Fund arrangement program. We show that an increase in the capped ratio (a decr... View more
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