Abstract

The article studies the interrelation between the stages of economic cycle and countercyclical buffer. Countercyclical buffer is aimed at forming a special reserve to be used during the economic downturn. For Russian banking system interrelations between the accumulation of capital surplus and stages of economic cycle is not evident. The authors make an assumption that Russian banks tend to decrease the capital buffer during the rise in economy and increase the capital buffer during the downturn. Recent global financial crisis showed the need to improve the regulation of the banking system and application of new requirements to the adequacy of capital of commercial banks. These requirements are aimed at strengthening the banks’ control over the system risk level and decreasing pro-cyclic effect of the banking system. Basel Committee on Banking Supervision introduced new requirements to the bank capital that also apply to Russian banking system. The regulatory requirements were raised for basic indicators, and
Original languageEnglish
Pages (from-to)49-54
JournalAmerican International Journal of Humanities and Social Science
Volume3
Issue number1
Publication statusPublished - 2017

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Banking system
Buffer
Economic cycles
Economic downturn
Global financial crisis
Banking supervision
Bank capital
Adequacy
Surplus
Basel Committee
Commercial banks

Cite this

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abstract = "The article studies the interrelation between the stages of economic cycle and countercyclical buffer. Countercyclical buffer is aimed at forming a special reserve to be used during the economic downturn. For Russian banking system interrelations between the accumulation of capital surplus and stages of economic cycle is not evident. The authors make an assumption that Russian banks tend to decrease the capital buffer during the rise in economy and increase the capital buffer during the downturn. Recent global financial crisis showed the need to improve the regulation of the banking system and application of new requirements to the adequacy of capital of commercial banks. These requirements are aimed at strengthening the banks’ control over the system risk level and decreasing pro-cyclic effect of the banking system. Basel Committee on Banking Supervision introduced new requirements to the bank capital that also apply to Russian banking system. The regulatory requirements were raised for basic indicators, and",
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JO - American International Journal of Humanities and Social Science

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