The BoE Prudential Regulation Research Consortium is a platform for researchers from the Bank of England’s Prudential Policy Directorate to present their work and receive feedback from expert academics. It also offers an opportunity to unlock potential future collaborations between Bank researchers and expert academics.

The Consortium consists of the following universities:

• CGR&IS, University of Bath
  
• Bayes Business School
  
• University of Edinburgh
  
• University of Essex
  
• University of Nottingham
  
• University of Palermo
  

As part of this project, the Consortium will organise seminars to discuss research conducted with the Prudential Policy Directorate.

The seminars will take place on Teams. Speakers will give a presentation, followed by a moderated Q&A.

Please contact Ania Zalewska to express your interest in attending this event.

Petros Katsoulis, “The repo market under Basel III”

• Bank of England
  
• 16 March - 1:30pm GST
  

Quynh-Anh Vo, Jonathan Smith, Benjamin Guin and Mauricio Salgado Moreno “Climate-related Disclosures in the UK Financial Sectors and their Determinants”

• Bank of England and Humboldt University of Berlin
  
• 27 April - 2:00pm BST
  

Austen Saunders and Matthew Willison, "Measure for measure’: evidence on the relative performance of regulatory requirements for small and large banks"

• Bank of England
  
• 16 May - 1:30pm BST
  

Paula Gallego Marquez, "EDAS based classifier for predicting banks' distress status"

• Bank of England
  
• 20 July - 1:30pm BST
  

Aakriti Mathur, Matthew Naylor, and Aniruddha Rajan, "Useful, usable, and used? Buffer usability during the Covid-19 crisis"

• Bank of England
  
• 6 October - 1:00pm BST
  
• Please contact Ania Zalewska to express your interest in attending this event.

In the next session, Matthew Naylor will present the following paper:

"Useful, usable, and used? Buffer usability during the Covid-19 crisis"

By Aakriti Mathur, Matthew Naylor, and Aniruddha Rajan

Abstract: We assess whether regulatory capital buffers, introduced in 2016 as part of the Basel III package of reforms, disincentivised UK banks from supporting lending through the Covid-19 crisis. Using a difference-in-differences econometric strategy, we compare capital and lending outcomes between banks with pre-pandemic common equity capital ratios (CET1 ratios) close to the threshold for regulatory buffers (i.e. low surplus banks) and those further away (i.e. high surplus banks). There is some evidence that low surplus banks lent less compared to their peers. Using granular loan-level data on residential mortgages, we show that low surplus banks reduced the size of mortgage loans they supplied and reduced their risk taking. We also find some evidence for the value of releasable buffers in promoting buffer usability. Banks that benefitted more from cuts in regulatory buffers at the onset of the pandemic grew their CET1 ratios by less and increased overall domestic lending as compared to their peers.