The DOI matches its Crossref record; the references it cites are not checked yet.
The Limits of Model‐Based Regulation
Open accessAbstract
Using loan‐level data from Germany, we investigate how the introduction of model‐based capital regulation affected banks' ability to absorb shocks. The objective of this regulation was to enhance financial stability by making capital requirements responsive to asset risk. Our evidence suggests that banks “optimized” model‐based regulation to lower their capital requirements. Banks systematically underreported risk, with underreporting more pronounced for banks with higher gains from it. Moreover, large banks benefitted from the regulation at the expense of smaller banks. Overall, our results suggest that sophisticated rules may have undesired effects if strategic misbehavior is difficult to detect.
Overview
The claims and statistics of this paper haven’t been checked yet.
Run the check — free, no account needed. It reads the open-access text and checks the sources it cites.
Integrity signals
Registry
Cites
Statistics
Verification
Claims the paper makes
The claims and statistics of this paper haven’t been checked yet.
Run the check — free, no account needed. It reads the open-access text and checks the sources it cites.
Self-check
Percentages, sums and reported differences re-computed from the paper’s own numbers.
The self-check needs the paper’s full text.
Citations
The citation lists haven’t been fetched yet
References 64 · Cited by 230
Research works printed but not linked: 30
- 10.1016/j.jmoneco.2014.04.014 · DOI
- Admati Anat andMartinHellwig 2013 The Bankers' New Clothes: What's Wrong with Banking and What to Do about It(Princeton University Press Princeton NJ). · DOI
- 10.1111/jmcb.12086 · DOI
- 10.1093/rfs/hhx036 · DOI
- 10.1111/jofi.12368 · DOI
- 10.1016/j.jbankfin.2017.01.013 · DOI
- Blattner Laura LuisaFarinha andFranciscaRebelo 2019 When losses turn into loans: The cost of undercapitalized banks ECB Working Paper No. 2228. · DOI
- 10.2307/2077755 · DOI
- 10.1016/j.jfi.2013.06.003 · DOI
- 10.1257/aer.20130392 · DOI
- 10.3905/jfi.2014.23.4.089 · DOI
- Feldhütter Peter, 2018, The myth of the credit spread puzzle, Review of Financial Studies, 31, 2897
- 10.1257/aer.91.2.431 · DOI
- 10.1016/j.jfineco.2014.11.005 · DOI
- Halvorsen Robert, 1980, The interpretation of dummy variables in semilogarithmic equations, American Economic Review, 70, 474
- 10.1086/697742 · DOI
- Hellwig Martin, 2010, Capital regulation after the crisis: Business as usual?, CESifo DICE Report, 8, 40
- 10.1093/jleo/7.special_issue.24 · DOI · Paper page
- 10.1016/S0378-4266(99)00052-7 · DOI
- 10.2307/1991999 · DOI
- Kashyap Anil RaghuramRajan andJeremyStein 2008 Rethinking capital regulation Federal Reserve Bank of Kansas City Symposium at Jackson Hole 431–471.
- Kashyap Anil K., 2004, Cyclical implications of the Basel II capital standards, Federal Reserve Bank of Chicago: Economic Perspectives, 1, 18
- Kennedy Peter, 1981, Estimation with correctly interpreted dummy variables in semilogarithmic equations, American Economic Review, 71, 801
- 10.1257/aer.98.4.1413 · DOI
- 10.1257/aer.20121036 · DOI
- 10.3982/ECTA12401 · DOI
- Meiselman Ben StefanNagel andAmiyatoshPurnanandam 2018 Judging banks' risk by the profits they report Working Paper Johns Hopkins University University of Chicago University of Michigan. · DOI
- Plosser Matthew andJoãoSantos 2014 Banks' incentives and the quality of internal risk models Federal Reserve Bank of New York Staff Report No. 704. · DOI
- 10.1016/j.jfineco.2014.09.012 · DOI
- 10.1111/1368-423X.00078 · DOI
Metadata
- Authors
- BEHN, M., HASELMANN, R., & VIG, V.
- Affiliations
- Goethe University Frankfurt (DE)
- Corresponding author
- BEHN, MARKUS
- Venue
- The Journal of Finance
- Publisher
- Wiley
- Published
- 2022-04-12
- Volume
- 77
- Issue
- 3
- Pages
- 1635-1684
- ISSN
- 0022-1082 (ISSN-L)
- 1540-6261
- OpenAlex
- W3124947353
- Cited by
- 230
- References
- 64
- Citations by year
- 2026: 32 · 2025: 32 · 2024: 14 · 2023: 20 · 2022: 13
- FWCI
- 13.34
- Type
- journal article
- Language
- en
- Open access
- hybrid
- doi.org
- Licence
- Locations
- The Journal of Finance (publishedVersion, cc-by-nc-nd)
- SSRN Electronic Journal (acceptedVersion)
- Econstor (Econstor) (submittedVersion)
- Publication Server of Goethe University Frankfurt am Main (Goethe University Frankfurt) (submittedVersion)
- Funders
- European Commission (HORIZON2020)
- Deutsche Forschungsgemeinschaft (FOR 2774)
- Deutsche Bundesbank
- H2020 European Research Council (679747)
- Topics
- Social Sciences › Economics, Econometrics and Finance › Finance › Banking stability, regulation, efficiency
- Social Sciences › Economics, Econometrics and Finance › Finance › finance, banking, and market dynamics
- Social Sciences › Economics, Econometrics and Finance › Finance › Global Financial Regulation and Crises
- Keywords
- bank capital requirements, bank risk-taking, financial stability, loan-level data, German banking sector
About these checks
Registry, retraction, Cites and statistics results are computed, not judged, with one exception: a printed reference that no index lists is read once by a model before it counts as a citation error. Claims are extracted by a model and kept only when their quote appears verbatim in the text; each cited source is then checked, with a model’s help, for whether it says what the claim relies on. Those verdicts can be wrong — read the claim’s quote and the cited source before relying on one.
Statistics and arithmetic are recomputed, not judged.
Confidence bands are shown only for fields calibrated on our annotated test set. None is calibrated yet, so no band is shown.
What counts as a claim ›How we measure confidence ›How we check this ›
Are you an author, or do you see a problem with this page? Request a review
How to cite
Cite CoChat for the checks on this page, and the paper for its own findings.
- This page
- CoChat. (2026). Citation check: The Limits of Model‐Based Regulation. https://app.cochat.ai/papers/10.1111/jofi.13124
- The paper
- BEHN, M., HASELMANN, R., & VIG, V. (2022). The Limits of Model‐Based Regulation. The Journal of Finance. https://doi.org/10.1111/jofi.13124
