This paper aims to propose a framework for estimating the optimal levels of capital at banks, elaborating factors such as liquidity and macroeconomic conditions. Firstly, as a preamble, the authors attempt to reorgani...This paper aims to propose a framework for estimating the optimal levels of capital at banks, elaborating factors such as liquidity and macroeconomic conditions. Firstly, as a preamble, the authors attempt to reorganize the variety of policy proposals for enhancing financial sector regulation. In light of the broad perspective of the prudential policy framework, the authors discuss the role of bank capital in enhancing banking-sector resilience. Secondly, the authors lay out an early warning system （EWS） to predict a financial crisis where the role of capital and liquidity are explicitly captured. Then, the authors apply the EWS as a component of a cost-benefit analysis （CBA） to gauge the benefit from raising capital and liquidity requirements, as more stringent regulations are expected to reduce the probability of financial ,crisis. On the other hand, financial-sector regulations should come along with certain costs. To quantify the cost, the authors employ some existing macroeconomic models to estimate the cost of raising capital and liquidity requirements. Combining the EWS （for benefit calculation） with the macroeconomic models （for cost calculation）, the authors provide a full-fledged CBA framework that can detemaine the optimal levels of capital that strike the right balance between the costs and benefits of the financial-sector regulation. The main results indicate that the optimal level of bank capital would considerably vary depending on the level of liquidity indicators both on the asset and liability sides of banks＇ balance sheets as well as macroeconomic conditions, typically represented by housing market inflation. Finally, the CBA framework suggests that banks could stand in a better shape with a counter-cyclical capital buffer to be well-prepared for a prospective distress.展开更多
Given the booming of internet usage in its domain, Chinese on-line shopping business is not growing proportionately. The absence of a market mechanism based on trust among suppliers and customers is to blame, although...Given the booming of internet usage in its domain, Chinese on-line shopping business is not growing proportionately. The absence of a market mechanism based on trust among suppliers and customers is to blame, although other factors as well holding the responsibility. Beginning with an introduction to the theory of ＂lemons＂, this paper reviews the status quo of trust in the Chinese cyber market, from the perspective of legislation, regulation and institution. It also prescribes several possible micro-solutions.展开更多
Although it has been nearly a decade since the onset of the global financial ,crisis, a lack of confidence and general uncertainty are still sweeping the world economy. The recovery of global growth has been sluggish ...Although it has been nearly a decade since the onset of the global financial ,crisis, a lack of confidence and general uncertainty are still sweeping the world economy. The recovery of global growth has been sluggish at best, and world demand remains depressed.展开更多
文摘This paper aims to propose a framework for estimating the optimal levels of capital at banks, elaborating factors such as liquidity and macroeconomic conditions. Firstly, as a preamble, the authors attempt to reorganize the variety of policy proposals for enhancing financial sector regulation. In light of the broad perspective of the prudential policy framework, the authors discuss the role of bank capital in enhancing banking-sector resilience. Secondly, the authors lay out an early warning system （EWS） to predict a financial crisis where the role of capital and liquidity are explicitly captured. Then, the authors apply the EWS as a component of a cost-benefit analysis （CBA） to gauge the benefit from raising capital and liquidity requirements, as more stringent regulations are expected to reduce the probability of financial ,crisis. On the other hand, financial-sector regulations should come along with certain costs. To quantify the cost, the authors employ some existing macroeconomic models to estimate the cost of raising capital and liquidity requirements. Combining the EWS （for benefit calculation） with the macroeconomic models （for cost calculation）, the authors provide a full-fledged CBA framework that can detemaine the optimal levels of capital that strike the right balance between the costs and benefits of the financial-sector regulation. The main results indicate that the optimal level of bank capital would considerably vary depending on the level of liquidity indicators both on the asset and liability sides of banks＇ balance sheets as well as macroeconomic conditions, typically represented by housing market inflation. Finally, the CBA framework suggests that banks could stand in a better shape with a counter-cyclical capital buffer to be well-prepared for a prospective distress.
文摘Given the booming of internet usage in its domain, Chinese on-line shopping business is not growing proportionately. The absence of a market mechanism based on trust among suppliers and customers is to blame, although other factors as well holding the responsibility. Beginning with an introduction to the theory of ＂lemons＂, this paper reviews the status quo of trust in the Chinese cyber market, from the perspective of legislation, regulation and institution. It also prescribes several possible micro-solutions.
文摘Although it has been nearly a decade since the onset of the global financial ,crisis, a lack of confidence and general uncertainty are still sweeping the world economy. The recovery of global growth has been sluggish at best, and world demand remains depressed.
