Capital Regulation of G-SIBS: Does One Size Fit All ?

41 Pages Posted: 15 Jun 2014

See all articles by Malgorzata Iwanicz-Drozdowska

Malgorzata Iwanicz-Drozdowska

Warsaw School of Economics, Institute of Finance

Iwona Schab

Warsaw School of Economics

Date Written: June 14, 2014

Abstract

The ongoing global financial crisis has enhanced the interest in the effective regulation and supervision of internationally active and large financial institutions, named as global systematically important financial institutions or banks (G-SIFIs or G-SIBs). The literature on G-SIBs has started to develop, although it is still infrequent. In this paper, we address a new question: is the quite uniform Basel Committee on Banking Supervision’s (BCBS) methodology adequate to regulate a diverse group of institutions? We use a panel data set covering 31 G-SIBs and the time range of 2006-2012 that demonstrates remarkable differences among the analyzed institutions. We find for example, that the relationships between risk and profitability differ strongly between ‘globally’ and ‘not so globally’ acting G-SIBs, meaning that the ‘one size fits all’ solution may be questioned.

Keywords: G-SIB, regulation, bank capital, risk

JEL Classification: G21, G15

Suggested Citation

Iwanicz-Drozdowska, Malgorzata and Schab, Iwona, Capital Regulation of G-SIBS: Does One Size Fit All ? (June 14, 2014). Available at SSRN: https://ssrn.com/abstract=2450529 or http://dx.doi.org/10.2139/ssrn.2450529

Malgorzata Iwanicz-Drozdowska (Contact Author)

Warsaw School of Economics, Institute of Finance ( email )

Warsaw
Poland

Iwona Schab

Warsaw School of Economics ( email )

aleja Niepodleglosci 162
PL-Warsaw, 02-554
Poland

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