A Model of Self-Regulation in Banking Industry

11 Pages Posted: 9 Feb 2014  

Sofiane Aboura

Université Paris XIII Nord - Department of Economics and Management

Emmanuel Lepinette

Université Paris-Dauphine - CEREMADE, CNRS

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Date Written: February 8, 2014

Abstract

This article derives a model of self-regulation where banks issue insurance products to hedge their leverage ratio. This approach is an alternative policy to Basel regulation for controlling systemic risk without increasing equity level. We show some conditions under which the model can be applied to each of the 22 banks of 5 major countries from 2005 to 2012.

Keywords: Self-regulation, banking regulation, systemic risk, insurance

JEL Classification: E44, E58, G01, G21, G28

Suggested Citation

Aboura, Sofiane and Lepinette, Emmanuel, A Model of Self-Regulation in Banking Industry (February 8, 2014). Available at SSRN: https://ssrn.com/abstract=2392778 or http://dx.doi.org/10.2139/ssrn.2392778

Sofiane Aboura (Contact Author)

Université Paris XIII Nord - Department of Economics and Management ( email )

99 avenue Jean-Baptiste
Clément, Villetaneuse 93430
France

Emmanuel Lepinette

Université Paris-Dauphine - CEREMADE, CNRS ( email )

Place du Marechal de Lattre de Tassigny
Paris Cedex 16, 75775
France

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