Countercyclical capital buffers in Finland
Kauko, Karlo (31.05.2012)
JulkaisusarjaBank of Finland. Bulletin
JulkaisijaBank of Finland
Julkaisun pysyvä osoite onhttps://urn.fi/URN:NBN:fi:bof-201408073177
Banks have been found to step up their credit supply in a cyclical upswing and to cut it back in a downswing. This tends to both amplify cyclical fluctuations and increase the threat of banking crises. According to the relevant draft directive, in order to ease this procyclicality problem, authorities could tighten the capital adequacy requirement in response to an overly fast credit stock growth. Internationally proposed criteria for setting an additional capital requirement may not perhaps be suitable for a country like Finland that is sensitive to economic fluctuations.
ISSN-L 1796-539X (print) ISSN 1796-5578 (online). ISSN-numerot muuttuneet vuonna 2006 näihin.