@article{iiasa14429,
          volume = {77},
           month = {April},
           title = {Basel III capital surcharges for G-SIBs are far less effective in managing systemic risk in comparison to network-based, systemic risk-dependent financial transaction taxes},
       publisher = {Elsevier},
         journal = {Journal of Economic Dynamics and Control},
             doi = {10.1016/j.jedc.2017.02.004},
           pages = {230--246},
            year = {2017},
        keywords = {Basel III; Systemic Risk; Resilience; Agent-Based Modelling; Self-organisation; Network Optimisation; DebtRank; Banking regulation; Sustainability},
             url = {https://pure.iiasa.ac.at/id/eprint/14429/},
            issn = {1879-1743},
        abstract = {In addition to constraining bilateral exposures of financial institutions, there exist essentially two options for future financial regulation of systemic risk: First, regulation could attempt to reduce the financial fragility of global or domestic systemically important financial institutions (G-SIBs or D-SIBs), as for instance proposed by Basel III. Second, it could focus on strengthening the financial system as a whole by reducing the probability of large-scale cascading events. This can be achieved by re-shaping the topology of financial networks. We use an agent-based model of a financial system and the real economy to study and compare the consequences of these two options. By conducting three computer experiments with the agent-based model we find that re-shaping financial networks is more effective and efficient than reducing financial fragility. Capital surcharges for G-SIBs could reduce systemic risk, but they would have to be substantially larger than those specified in the current Basel III proposal in order to have a measurable impact. This would cause a loss of efficiency.},
          author = {Poledna, S. and Bochmann, O. and Thurner, S.}
}