Assessing the Cost of Financial Regulation

Author/Editor: Douglas Elliott ; Andre Santos
Publication Date: September 26, 2012
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Disclaimer: This Working Paper should not be reported as representing the views of the IMF. The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate
Summary: This study assesses the overall impact on credit of the financial regulatory reforms in Europe, Japan, and the United States. Long-term cost estimates are provided for Basel III capital and liquidity requirements, derivatives reforms, and higher taxes and fees. Overall, average lending rates in the base case would rise by 18 bps in Europe, 8 bps in Japan, and 28 bps in the United States. These results are similar to the official BIS assessments of Basel III and an OECD analysis, but lower as a result of including expense cuts and reductions in the returns required by investors. As a result, they are markedly lower than those of the IIF.
Series: Working Paper No. 12/233
Subject(s): Banking sector | Banking systems | Capital controls | Europe | Financial system stability assessment | Interest costs | Japan | Liquidity controls | United States

Publication Date: September 26, 2012
ISBN/ISSN: 9781475510836/1018-5941 Format: Paper
Stock No: WPIEA2012233 Pages: 81
US$18.00 (Academic Rate:
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