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A paper by assistant professor Stefanie Huber has been cited during a speech of ECB board member Pentti Hakkarainen about the health of banks in the Eurozone earlier this month.

ASE research

Hakkarainen used his speech ‘Banks in shackles – myth or reality’ on 2 October to look back at what the recent global regulation of the banking sector had achieved ten years after the crisis. What should be the future priorities for regulatory reform?
Hakkarainen convincingly argues during his speech, that the re-regulation has not gone far enough and that capital requirements remain below their societally optimal level.

Sectoral risk-weights and macroprudential policy

As grounds for one of his statements, he referred to the research paper ‘Sectoral risk-weights and macroprudential policy’, written by Stefanie Huber (ASE, Quantitative Economics section), Alex Hodbod and Konstantin Vasilev. The paper evaluates the implication of different designs of bank capital requirements regarding their impact on the tendency of banks to amplify the business cycle. The full paper can be viewed here