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Simulation of the Effect of Financial Regulation on the Stability of Financial Systems and Financial Institution Behavior

  • Takamasa KikuchiEmail author
  • Masaaki Kunigami
  • Takashi Yamada
  • Hiroshi Takahashi
  • Takao Terano
Conference paper
Part of the Smart Innovation, Systems and Technologies book series (SIST, volume 96)

Abstract

This study focuses on the influence of financial institutions’ behavior under financial regulation on financial systems. For this purpose, the authors propose simulation models of systemic risks expressing financial regulation and the financing and investment behavior of financial institutions. Using this model, scenario analysis is performed based on cases generated from a combination of various regulations. We then approach the issue of the trade-off between the stability of the financial system and a decline in liquidity. Our numerical experiment shows that the liquidity of marketable assets could be reduced by imposing a BS restriction.

Keywords

Agent-based simulation Systemic risk Financial regulations Asset liability management 

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Copyright information

© Springer International Publishing AG, part of Springer Nature 2019

Authors and Affiliations

  • Takamasa Kikuchi
    • 1
    Email author
  • Masaaki Kunigami
    • 2
  • Takashi Yamada
    • 3
  • Hiroshi Takahashi
    • 1
  • Takao Terano
    • 2
  1. 1.Keio UniversityYokohamaJapan
  2. 2.Tokyo Institute of TechnologyYokohamaJapan
  3. 3.Yamaguchi UniversityYamaguchi-shiJapan

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