Český finanční a účetní časopis 2016(2):5-33 | DOI: 10.18267/j.cfuc.471

Theoretical backgrounds of modern bank regulation

Petr Pavlík
Petr Pavlík; katedra měnové teorie a politiky, Fakulta financí a účetnictví, Vysoká škola ekonomická v Praze, nám. W. Churchilla 4, 130 67 Praha 3; <ppavlik@email.cz>.

The article deals with theoretical and practical dimension of the third generation of Basel regulatory standards. The implementation proves more complex than previously supposed. Modern bank regulation theory focus mainly on four areas: factors that lies beyond bank equity pricing, transmission channels of banking crisis on the international level, optimal design of the safety net, well-balanced intensity of regulatory restrictions. Unfortunately, in the real world, bank regulation standards do not often follow the recommendations of economic theory. The rules remain to be subject of policy influence of diverse advocacy groups including banks themselves. The aim of this article is to outline the main ways of actual economic research and the challenges that lie ahead. Special attention is paid to such issues as capital adequacy, moral hazard and tax distorsion of debt financing. The influence of increased capital adequacy requirements, actual income tax policy and deregulation on the stability of commercial banks is being questioned within the study.

Keywords: Bank regulation; Capital adequacy; Moral hazard; Tax distorsion, Basel III.
JEL classification: G20, G21, G24, G28

Published: June 1, 2016  Show citation

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Pavlík, P. (2016). Theoretical backgrounds of modern bank regulation. Czech Financial and Accounting Journal, 2016(2), 5-33. doi: 10.18267/j.cfuc.471
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