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The Aggregate Regulatory Response and the Costs of Intermediation

The Aggregate Regulatory Response and the Costs of Intermediation. Banks’ Internal Costs of Capital and Business Models. Economies of Scale in Banking


While there is general agreement about the need for a new tighter regulatory regime being introduced, there is considerable uncertainty about how the new regulations on capital and liquidity will impact on the banking industry and its customer base. There is, therefore, a demand for considered academic analyses of these timely issues. The ICFR has organised a conference on this theme on October 14, and in connection with this conference the ICFR has issued a call for papers (click here to view). We have therefore invited submissions on (but not necessarily limited to) the following topics:

a. The costs of capital for banks, with and without government guarantees
b. Quantifying the impact of the new regulations on the cost and availability of bank credit
c. Estimating “varying” costs of capital for a banking institution (varying with leverage, exposure etc)
d. Understanding the private costs (e.g. taxes, ROE, ROA, based compensation) and the social costs (e.g.  lower marker discipline) of bank capital
e. Costs of winding down/resolution plans
f. Conglomerates – regulation and financing (internal markets of bank holding companies)
g. Aggregate bank capital management: relationship  between regulatory bank capital and actual bank capital – link to asset liability and dividends.

The ICFR welcomes submissions for this conference and also proposals for further research in these areas.