Swiss Finance Institute Professor Steven Ongena from the University of Zurich and coauthors Professor Reint Gropp from the Halle Institute for Economic Research and Professor Thomas C. Mosk and Carlo Wix from Goethe University Frankfurt studied the impact of the 2011 European Banking Authority capital exercise on the real economy. Based on this exercise, the researchers forecast that the Basel III reform may induce banks to reduce the amount of assets they finance by lowering their credit exposure to corporate and retail clients, but that they will likely not increase their amount of regulatory capital. Dr. Christian Capuano from FINMA, on the other hand, expects a combined set of reactions from banks but no material impact on the credit granting process.

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