Marginal cost of risk-based capital and risk-taking

Marginal cost of risk-based capital and risk-taking

We explore the impact of capital adequacy requirements on financial institutions' risk-taking behavior from a novel perspective. Specifically, we show that an important feature of the risk-based capital (RBC) system a built-in diversification benefit in aggregating risk categories induces moral...

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Bibliographic Details
Main Authors: CHEN, Tao, GOH, Jing Rong, KAMIYA, Shinichi, LOU, Pingyi
Format: text
Language:English
Published: Institutional Knowledge at Singapore Management University 2019
Subjects:
Risk-based capital
Risk taking
Capital regulation
Insurance companies
Corporate Finance
Finance
Finance and Financial Management
Online Access:https://ink.library.smu.edu.sg/soe_research/2617
https://ink.library.smu.edu.sg/context/soe_research/article/3616/viewcontent/SSRN_id2943371.pdf
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Institution: Singapore Management University
Language: English

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https://ink.library.smu.edu.sg/soe_research/2617
https://ink.library.smu.edu.sg/context/soe_research/article/3616/viewcontent/SSRN_id2943371.pdf

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