Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/239441 
Year of Publication: 
2021
Citation: 
[Journal:] Journal of Risk and Financial Management [ISSN:] 1911-8074 [Volume:] 14 [Issue:] 1 [Publisher:] MDPI [Place:] Basel [Year:] 2021 [Pages:] 1-29
Publisher: 
MDPI, Basel
Abstract: 
This paper reviews the cost-benefit analysis, or 'regulatory impact analysis' (RIA), in US bank regulators' risk-based capital (RBC) rule proposals. We review the principles of cost-benefit analysis and its application by US bank regulators. We provide a brief background on RBC rules and review the literature on their costs and benefits. We then evaluate 27 proposed RBC rules and related rules on bank liquidity. We find that nine of the 27 rules include RIAs. Five of the RIAs claim the proposed rule will create net benefits, but none provide quantitative evidence that the benefits exceed the costs. In two proposals, the evidence cited indicates the rules' net benefits may actually be negative.
Subjects: 
banks
capital
risk-based capital
regulation
cost-benefit analysis
JEL: 
G21
G28
G32
E58
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article

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