Economic and Regulatory Capital in Banking: What Is the Difference?

摘要: We analyze the determinants of regulatory capital (the minimum required by regulation), economic (that chosen shareholders without and actual with regulation) in a dynamic model bank loan-portfolio return described single-risk-factor Basel II. show that variables only affect capital, such as intermediation margin cost can account for large deviations from capital. Actual is closer to but threat closing undercapitalized banks generates significant buffers. Market discipline, proxied coverage deposit insurance, increases although effects are small.