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SUMMARY:Bank Capital and Aggregate Credit
DTSTART:20150224T121500
DTEND:20150224T131500
DTSTAMP:20261002T015149Z
UID:cd8209d18a9b4bff05895a34a9ac79ecc1a487570972b561ac9f5cd7
CATEGORIES:Conferences - Seminars
DESCRIPTION:Jean-Charles ROCHET (University of Zurich)\nThis paper seeks t
 o explain the role of bank capital in fluctuations of lending and output. 
 We build a continuous time equilibrium model of an economy in which commer
 cial banks finance their loans by deposits and equity\,  while facing iss
 uance costs when they raise new equity. The dynamics of the loan rate and 
 the volume of lending in the economy are driven by aggregate bank capitali
 zation. The model has a unique Markov competitive equilibrium that can be 
 solved in closed form.  We show that the competitive equilibrium is const
 rained inefficient: banks lend too much in upturns and too little in downt
 urns. However\, imposing a standard capital regulation does not help. 
LOCATION:UNIL\, Extranef\, room 126 https://planete.unil.ch/plan/?local=EX
 T-126
STATUS:CONFIRMED
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