Banking on capital
Research output: Non-textual form › Web publication/site
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Research output: Non-textual form › Web publication/site
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TY - ADVS
T1 - Banking on capital
AU - Altunbas, Yener
AU - Mangenelli, Simone
AU - Marques-Ibanez, David
PY - 2017/11/14
Y1 - 2017/11/14
N2 - Prudential supervision of banks has increasingly relied on capital requirements. But bank capital played a relatively minor role in predicting bank solvency during the Global Crisis, except for scarcely capitalised banks. This column argues that while capital is a helpful tool to support bank financial stability, it is complex for supervisors to calibrate it precisely. Macroprudential authorities should be able to complement capital-based tools with additional, borrower-based prudential instruments.
AB - Prudential supervision of banks has increasingly relied on capital requirements. But bank capital played a relatively minor role in predicting bank solvency during the Global Crisis, except for scarcely capitalised banks. This column argues that while capital is a helpful tool to support bank financial stability, it is complex for supervisors to calibrate it precisely. Macroprudential authorities should be able to complement capital-based tools with additional, borrower-based prudential instruments.
M3 - Web publication/site
PB - VOXEU.org
ER -