Basel III and CEO Compensation in Banks: A New Regulatory Attempt After the Crisis

Basel III and CEO compensation in banks : Pay structures as a regulatory signal

This paper proposes a new regulatory approach that implements capital requirements contingent on managerial compensation. We argue that excessive risk taking in the financial sector originates from the shareholder moral hazard created by government guarantees rather than from corporate governance failures within banks. The idea of the proposed regulation is to utilize the compensation scheme to...

CHAPTER 1 Supervision of Islamic Banks : The Regulatory Challenge — Basel II and Basel III

Discussion of “CEO Compensation, Regulation, and Risk in Banks: Theory and Evidence from the Financial Crisis”

The Cerasi and Oliviero contribution in this issue explores an important question from the banking regulation perspective: how does bank CEO compensation affect risk taking? It first lays out a model that illustrates how using variable compensation for bank CEOs (an exogenous free parameter in the model) may have an ambiguous effect on the CEO’s risk-taking behavior. The key feature of the mode...

Modeling Basel Regulatory in DSGE with Emphasis on Adequacy Regulatory

In this paper Basel regulation is modeled in Dynamic Stochastic General Equilibrium (DSGE) framework. For this purpose, using data from 1981-2017 for Iran, capital adequacy as an importance regulation is modeled. Results show Basel regulation has procyclical effect. According to the results of the model and according to the realities of economy and banking system of Iran, in recession, lending ...

Enhanced Prudential Standards Under Basel Iii: What Consequences For The Profitability Of Banks

Since the subprime financial crisis, international financial regulatory institutions (Basel, MIFID, Dodd-Frank), have strengthened regulatory requirements on systemically important banks. The Basel Committee on Banking Supervision, and based on the G20 recommendations, has drawn up a reform program to reconfigure the banking system, based mainly on increasing the capital requirement. The progra...