IDEAS home Printed from https://ideas.repec.org/a/fip/fednep/y1995ijulp1-12nv.1.no.2.html
   My bibliography  Save this article

A prolegomenon to future capital requirements

Author

Listed:
  • Arturo Estrella

Abstract

Bank supervisors have made significant strides since 1980 in the area of capital requirements, and they are currently pursuing further refinements. This article looks beyond such developments at longer term supervisory goals. Abstracting to some extent from the current regulatory framework, the author attempts to delineate a set of fundamental principles for future work on capital requirements. He distinguishes minimum capital--an objective standard imposed by regulators across firms--from optimum capital--a subjective standard adopted by individual firms to cover their own risks-- and shows how the two concepts can form the basis for a general supervisory approach to capital.

Suggested Citation

  • Arturo Estrella, 1995. "A prolegomenon to future capital requirements," Economic Policy Review, Federal Reserve Bank of New York, issue Jul, pages 1-12.
    • Handle: RePEc:fip:fednep:y:1995:i:jul:p:1-12:n:v.1.no.2
    as

    Download full text from publisher

    File URL: https://www.newyorkfed.org/medialibrary/media/research/epr/95v01n2/9507estr.html
    Download Restriction: no
    File URL: https://www.newyorkfed.org/medialibrary/media/research/epr/95v01n2/9507estr.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. anonymous, 1992. "Membership of the Board of Governors of the Federal Reserve System, 1913-92," Federal Reserve Bulletin, Board of Governors of the Federal Reserve System (U.S.), issue Jan, pages 105-106.
    2. Franklin R. Edwards & Frederic S. Mishkin, 1995. "The decline of traditional banking: implications for financial stability and regulatory policy," Economic Policy Review, Federal Reserve Bank of New York, vol. 1(Jul), pages 27-45.
    3. White, Lawrence J, 1989. "The Reform of Federal Deposit Insurance," Journal of Economic Perspectives, American Economic Association, vol. 3(4), pages 11-29, Fall.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. S. Mishkin, Frederic, 1999. "Financial consolidation: Dangers and opportunities," Journal of Banking & Finance, Elsevier, vol. 23(2-4), pages 675-691, February.
    2. Jose A. Lopez, 1996. "Regulatory Evaluation of Value-at-Risk Models," Center for Financial Institutions Working Papers 96-51, Wharton School Center for Financial Institutions, University of Pennsylvania.
    3. Arturo Estrella, 1998. "The Future of Regulatory Capital: General Principles and Specific Proposals," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 134(IV), pages 599-616, December.
    4. Mingo, John J., 2000. "Policy implications of the Federal Reserve study of credit risk models at major US banking institutions," Journal of Banking & Finance, Elsevier, vol. 24(1-2), pages 15-33, January.
    5. Darryll Hendricks & Beverly Hirtle, 1997. "Bank capital requirements for market risk: the internal models approach," Economic Policy Review, Federal Reserve Bank of New York, vol. 3(Dec), pages 1-12.
    6. Jürgen Von Hagen & Ingo Fender, 1998. "Central Bank Policy in a More Perfect Financial System," Open Economies Review, Springer, vol. 9(1), pages 493-532, January.
    7. Franz R. Hahn, 2001. "Macroprudential Financial Regulation and Monetary Policy," WIFO Working Papers 154, WIFO.
    8. Beverly Hirtle & Mark E. Levonian & Marc R. Saidenberg & Stefan Walter & David M. Wright, 2001. "Using credit risk models for regulatory capital: issues and options," Economic Policy Review, Federal Reserve Bank of New York, issue Mar, pages 19-36.
    9. Arturo Estrella, 1998. "Formulas or supervision? Remarks on the future of regulatory capital," Economic Policy Review, Federal Reserve Bank of New York, vol. 4(Oct), pages 191-200.
    10. Arturo Estrella & Sangkyun Park & Stavros Peristiani, 2000. "Capital ratios as predictors of bank failure," Economic Policy Review, Federal Reserve Bank of New York, issue Jul, pages 33-52.
    11. Andrew Kuritzkes & Til Schuermann & Scott M. Weiner, 2002. "Risk Measurement, Risk Management and Capital Adequacy in Financial Conglomerates," Center for Financial Institutions Working Papers 03-02, Wharton School Center for Financial Institutions, University of Pennsylvania.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Kurz, Michael & Kleimeier, Stefanie, 2019. "Credit Supply: Are there negative spillovers from banks’ proprietary trading? (RM/19/005-revised-)," Research Memorandum 026, Maastricht University, Graduate School of Business and Economics (GSBE).
    2. Emil Adamek & Jan Janku, 2022. "What Drives Small Business Crowdfunding? Impact of Macroeconomic and Financial Factors," Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, vol. 72(2), pages 172-196, June.
    3. Emmanuelle Nys, 2008. "Service provision and loans : Price and risk implications," Revue d'économie politique, Dalloz, vol. 118(3), pages 411-428.
    4. Russell Olukayode Christopher Somoye & Bamidele M. Ilo & Lateef Adewale Yunusa, 2019. "INTEREST INCOME AND DEPOSIT MONEY BANKS (DMBs) PERFORMANCE IN NIGERIA," Economic Review: Journal of Economics and Business, University of Tuzla, Faculty of Economics, vol. 17(2), pages 15-25, November.
    5. Duca, John V., 2013. "Did the commercial paper funding facility prevent a Great Depression style money market meltdown?," Journal of Financial Stability, Elsevier, vol. 9(4), pages 747-758.
    6. Ari Hyytinen & Tuomas Takalo, 2002. "Enhancing Bank Transparency: A Re-assessment," Review of Finance, European Finance Association, vol. 6(3), pages 429-445.
    7. Braun, Dieter, 1995. "Bank Deposit Insurance and EMU," MPRA Paper 89588, University Library of Munich, Germany.
    8. Nicola Cetorelli & Beverly Hirtle & Donald P. Morgan & Stavros Peristiani & João A. C. Santos, 2007. "Trends in financial market concentration and their implications for market stability," Economic Policy Review, Federal Reserve Bank of New York, vol. 13(Mar), pages 33-51.
    9. Sung-Eun Yu, 2017. "The Role of Nonbank Financial Institutions in the Monetary Transmission Mechanism: Theory and Evidence," Working Paper Series, Department of Economics, University of Utah 2017_04, University of Utah, Department of Economics.
    10. Sangkyun Park, 2024. "Mutual insurance for catastrophe hazards: Case of deposit insurance," Economic Notes, Banca Monte dei Paschi di Siena SpA, vol. 53(1), February.
    11. Ronald Fischer & Nicolás Inostroza & Felipe J. Ramírez, 2013. "Banking Competition and Economic Stability," Documentos de Trabajo 296, Centro de Economía Aplicada, Universidad de Chile.
    12. Süleyman DEĞİRMEN & Filiz ÖZAĞ, 2007. "Banka Sermaye Kanalı Mevcudiyeti: Türk Bankacılık Sektörü İçin Bir Analiz," Ekonomik Yaklasim, Ekonomik Yaklasim Association, vol. 18(63), pages 29-54.
    13. Carruthers, Bruce G., 2013. "Diverging derivatives: Law, governance and modern financial markets," Journal of Comparative Economics, Elsevier, vol. 41(2), pages 386-400.
    14. Xavier Vives, 2011. "Competition and Stability in Banking," Central Banking, Analysis, and Economic Policies Book Series, in: Luis Felipe Céspedes & Roberto Chang & Diego Saravia (ed.),Monetary Policy under Financial Turbulence, edition 1, volume 16, chapter 12, pages 455-502, Central Bank of Chile.
    15. Apergis, Emmanuel & Apergis, Iraklis & Apergis, Nicholas, 2019. "A new macro stress testing approach for financial realignment in the Eurozone," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 61(C), pages 52-80.
    16. Jan Marc Berk, 2002. "Central banking and financial innovation. A survey of the modern literature," BNL Quarterly Review, Banca Nazionale del Lavoro, vol. 55(222), pages 263-297.
    17. Bossone, Biagio, 2001. "Do banks have a future?: A study on banking and finance as we move into the third millennium," Journal of Banking & Finance, Elsevier, vol. 25(12), pages 2239-2276, December.
    18. William Gissy, 2000. "Regulatory forbearance: A reconsideration," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 6(4), pages 722-729, November.
    19. Lawrence J. White, 1992. "What Should Banks Really Do?," Contemporary Economic Policy, Western Economic Association International, vol. 10(3), pages 104-112, July.
    20. Elena Carletti & Philipp Hartmann, 2003. "Competition and stability: what's special about banking?," Chapters, in: Paul Mizen (ed.), Monetary History, Exchange Rates and Financial Markets, chapter 8, Edward Elgar Publishing.

    More about this item

    Keywords

    Bank capital; Bank supervision;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:fip:fednep:y:1995:i:jul:p:1-12:n:v.1.no.2. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Gabriella Bucciarelli (email available below). General contact details of provider: https://edirc.repec.org/data/frbnyus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.