Reconsidering bank capital regulation: a new combination of rules, regulators, and market discipline

Published

Journal Article

© 2016 Informa UK Limited, trading as Taylor & Francis Group. Despite revisions to bank capital standards, fundamental shortcomings remain: the rules for setting capital requirements need to be simpler, and resolution should be an essential part of the capital requirement framework.We propose a revised system of capital regulation that addresses these needs by making changes to all three pillars of bank regulation: only common equity should be recognized as regulatory capital, and risk weighting of assets should be abandoned; capital requirements should be assigned on an institution-by-institution basis according to a regulatory (s, S) approach developed in the paper; a standard for prompt, corrective action is incorporated into the (s, S) approach.

Full Text

Duke Authors

Cited Authors

  • Fullenkamp, C; Rochon, C

Published Date

  • October 2, 2017

Published In

Volume / Issue

  • 20 / 4

Start / End Page

  • 343 - 359

Electronic International Standard Serial Number (EISSN)

  • 1748-7889

International Standard Serial Number (ISSN)

  • 1748-7870

Digital Object Identifier (DOI)

  • 10.1080/17487870.2016.1181550

Citation Source

  • Scopus