This paper examines the prudential role and the effectiveness of banking regulation in EU. Using a unique sample of banks' balance and off-balance sheet data, we focus on the capital requirements (tier1) and the liquidity characteristics of the banking sector. The latter factor is accounted for by the Basel III net stable funding ratio (NSFR) that was launched on 2010 with effect on 2018 and refers to the long-term liquidity provision of banks. By adopting a dynamic panel-vector autoregression (VAR) analysis, we have found strong evidence in favor to the forecasting and prudential supervision role of NSFR, which provides the means for improving banks' performance and for promoting the stability in the banking sector. On the other hand, capital requirements (tier1) incorporate a responsive component to uncertainty in the financial system. Finally, our findings support the prudential role of Basel III liquidity provisions, which can play the role of leading indicators of financial stability of financial markets and specifically of the financial sector.

中文翻译：

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巴塞尔协议 III 流动性条款对金融稳定的审慎作用

本文考察了欧盟银行业监管的审慎作用和有效性。我们使用银行资产负债表外数据的独特样本，关注银行业的资本要求（一级）和流动性特征。后一个因素由 2010 年推出并于 2018 年生效的巴塞尔协议 III 净稳定资金比率 (NSFR) 计算，指的是银行的长期流动性供应。通过采用动态面板向量自回归 (VAR) 分析，我们发现了有力的证据支持 NSFR 的预测和审慎监管作用，这为提高银行绩效和促进银行业稳定提供了手段。另一方面，资本要求（一级）包含了对金融体系不确定性的响应成分。