Watch What They Do, Not What They Say: Estimating Regulatory Costs from Revealed Preferences

• 成果类型: Article
• 署名作者: Alvero, Adrien; Ando, Sakai; Xiao, Kairong
• 署名单位: Columbia University; International Monetary Fund
• 刊物名称: REVIEW OF FINANCIAL STUDIES
• ISSN/ISSBN: 0893-9454
• DOI: 10.1093/rfs/hhac089
• 发表日期: 2023
• 页码: 2224
• 关键词: BENEFIT-ANALYSIS; frictions; LIFE; form

摘要

We show that distortion in the size distribution of banks around regulatory thresholds can be used to identify costs of bank regulation. We build a structural model in which banks can strategically bunch their assets below regulatory thresholds to avoid regulations. The resultant distortion in the size distribution of banks reveals the magnitude of regulatory costs. Using U.S. bank data, we estimate the regulatory costs imposed by the Dodd-Frank Act. Although the estimated regulatory costs are substantial, they are significantly lower than banks' self-reported estimates.