Series: IMF Working Papers
Author(s): Arnoud Boot , and Lev Ratnovski
Publisher: INTERNATIONAL MONETARY FUND
Publication Date: 02 October 2012
Keywords: Bank regulation, proprietary trading, relationship banking, Volcker rule, moral hazard, financial markets, bank profits, bank profitability, Government Policy and Regulation,
We study the effects of a bank's engagement in trading. Traditional banking is relationship-based: not scalable, long-term oriented, with high implicit capital, and low risk (thanks to the law of large numbers). Tr...