01953cas a2200313 a 4500 AALejournalIMF022396 230101c9999 xx r poo 0 0eng d 5.00 USD 9781616358938 1018-5941 BD-DhAAL BD-DhAAL Abad, Jose. Usability of Bank Capital Buffers : The Role of Market Expectations / Jose Abad, Antonio Garcia Pascual. Washington, D.C. : International Monetary Fund, 2022. 1 online resource (61 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students Following the COVID shock, supervisors encouraged banks to use capital buffers to support the recovery. However, banks have been reluctant to do so. Provided the market expects a bank to rebuild its buffers, any draw-down will open up a capital shortfall that will weigh on its share price. Therefore, a bank will only decide to use its buffers if the value creation from a larger loan book offsets the costs associated with a capital shortfall. Using market expectations, we calibrate a framework for assessing the usability of buffers. Our results suggest that the cases in which the use of buffers make economic sense are rare in practice. Mode of access: Internet Banks imf Depository Institutions imf Financial Institutions and Services imf Micro Finance Institutions imf Mortgages imf Garcia Pascual, Antonio. IMF Working Papers; Working Paper ; No. 2022/021 Full text available on IMF http://elibrary.imf.org/view/journals/001/2022/021/001.2022.issue-021-en.xml IMF e-Library