International Prudential Regulation, Regulatory Risk and Cost of Bank Capital

• Main Author: Ngo, Phong T. H.
• Format: Article
• Language: English
• Published: Universiti Utara Malaysia 2007
• Subjects: HG Finance
• Online Access: http://repo.uum.edu.my/25098/1/IJBF%205%201%202007%2027%2058.pdf; http://repo.uum.edu.my/25098/; http://ijbf.uum.edu.my/index.php/previous-issues/135-the-international-journal-of-banking-and-finance-ijbf-vol-5-no-1-2008
• Institution: Universiti Utara Malaysia

We define regulatory risk as regulation that leads to an increase in the cost of capital for a regulated firm. In a general equilibrium setting, scholars have shown that uniform increases in capital requirements lead to an increase in the cost of capital. We extend their model to show that when regu...