The role of capital in financial institutions
Роль капитала в финансовых учреждениях
1995-06-01
SCID: 54.1/fwvk6csu
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bank capitalcapital measurementcapital requirementsfinancial institutionsregulatory requirements
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Abstract (AI)
This introductory article examines the role of capital in financial institutions — why it is important, how market-generated capital ‘requiremenents’ differ from regulatory requirments and the form that regulatory requirements should take. Along the way, we examine historical trends in bank capital, problems in measuring capital, and some possible unintended consequences of capital requirements. Within this framework, we evaluate how the contributions to this special issue advance the literature and suggest topics for future research.
Key Findings
1
Capital plays a central role in financial institutions, motivating examination of why adequate capitalization matters.
2
Capital requirements may produce unintended consequences that should be considered in regulatory policy.
3
Historical trends in bank capital and difficulties in measuring capital complicate the assessment of financial institution strength.
4
Market-generated capital requirements differ from regulatory capital requirements, raising questions about how regulation should be designed.
5
The article evaluates contributions to the special issue and identifies priorities for future research on financial institution capital.
Research Object
capital in financial institutions
Research Subject
the importance, measurement, market-generated and regulatory capital requirements, and unintended consequences of capital requirements
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1995-06-01
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