No. 65. BASEL II: DESCRIPTION AND CONSEQUENCES FOR THE BANKING SYSTEM (in Greek)

Y. Panagopoulos, Y. Peletides. 2007. | ISBN: 978-960-341-077-5

 

The adoption of the Basel II (2006) directives creates new conditions in the way the banking book [loans] and the trading book [securities] should be expanded in the banking system. This study extensively analyses the link between equity and the two aforementioned books. In the macro level the importance of the equity -through Basel II directives- brings forward the existence of a “new credit (equity) multiplier” regarding the money supply process of the banking system. This new economic reality can help us to redefine the monetary policy debate between the Orthodox (New Keynesian and New Consensus [NK/NC]) and the Post Keynesians (Horizontalists and Structuralists). As a second stage a multivariate loan model is next proposed for every developed banking system (in our empirical case for Greece and Eurozone). This model can substantially help us for a final clarification of the money endogeneity/exogeneity issue which is very important for an effective monetary policy.