Possible Unintended Consequences of Basel III and Solvency II

71 Pages Posted: 16 Aug 2011

See all articles by Gregorio Impavido

Gregorio Impavido

International Monetary Fund (IMF); World Bank

Ahmed I. Al-Darwish

Government of the Kingdom of Saudi Arabia - Saudi Arabian Monetary Agency (SAMA); International Monetary Fund (IMF)

Michael Hafeman

affiliation not provided to SSRN

Malcolm Kemp

Nematrian

Padraic O'Malley

affiliation not provided to SSRN

Date Written: August 2011

Abstract

In today’s financial system, complex financial institutions are connected through an opaque network of financial exposures. These connections contribute to financial deepening and greater savings allocation efficiency, but are also unstable channels of contagion. Basel III and Solvency II should improve the stability of these connections, but could have unintended consequences for cost of capital, funding patterns, interconnectedness, and risk migration.

Suggested Citation

Impavido, Gregorio and Al-Darwish, Ahmed I. and Al-Darwish, Ahmed I. and Hafeman, Michael and Kemp, Malcolm and O'Malley, Padraic, Possible Unintended Consequences of Basel III and Solvency II (August 2011). IMF Working Paper No. 11/187, Available at SSRN: https://ssrn.com/abstract=1910490

Gregorio Impavido (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

HOME PAGE: http://www.imf.org

World Bank ( email )

1818 H Street, N.W.
Washington, DC 20433
United States

Ahmed I. Al-Darwish

Government of the Kingdom of Saudi Arabia - Saudi Arabian Monetary Agency (SAMA) ( email )

Saudi Arabia

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Michael Hafeman

affiliation not provided to SSRN

No Address Available

Malcolm Kemp

Nematrian ( email )

South Croydon
United Kingdom

Padraic O'Malley

affiliation not provided to SSRN

No Address Available

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