The economic effects of changes to bank capital regulation: evidence from the United Kingdom

2026

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AI-generated summary

1) This paper analyzes the economic effects of changes to bank capital regulation in the UK, offering insights into financial stability and market competition.

2) * Examines the impact of prudential capital changes on lending, macroeconomic outcomes, and banking competition using UK data.
* Employs a structural VAR framework with sign and narrative restrictions, drawing on UK regulatory stress tests.
* Investigates state-dependent effects, finding that recessions amplify short-run contractions but lead to quicker recoveries, while expansions see more persistent effects.

3) Bank capital regulation, financial stability, lending, macroeconomic effects, banking competition

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