Abstract
This chapter takes into consideration the raising of capital from time to time or the improving of risk management and efficiency from one period to another in the context of banks.
The raising of capital is the main tool used by regulation on a prudential application and by supervision on a discretional application in order to maintain the viability of the banking system. Capital requirements are calculated through Basel III and the forthcoming Basel IV; they are also imposed as an additional tool through discretional decisions by supervisory authorities. This can be viewed as a form of “recurrent stressing” to be imposed on banks as a means of pursuing the stability objective. It is important to point out that capital raising is useful only in order to hedge the solvency risk at the specific date examined and only if the solvency risk is correctly estimated.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Similar content being viewed by others
References
Acharya, V. V., Cooley, T. F., Richardson, M. P., & Walter, I. (2010). Regulating wall street: The Dodd Franck Act and the new architecture of global finance. New York: Wiley.
Andenas, M., & Supino, I. (2015). Politics and finance with reference to the European institutional frame. Law and Economics Yearly Review, 1, 144–160.
Barker, D., & Holdsworth, D. (1993). The causes of bank failures in the 1980s (No. 9325). Federal Reserve Bank of New York.
Berger, A. N., Herring, R. J., & Szegö, G. P. (1995). The role of capital in financial institutions. Journal of Banking & Finance, 19(3), 393–430.
Bliss, R. R. (1995). Risk-based bank capital: Issues and solutions. Economic Review-Federal Reserve Bank of Atlanta, 80(5), 32.
Capriglione, F., & Sacco Ginevri, A. (2015). Politics and finance in the European Union. Law and Economics Yearly Review, 1, 4–109.
Claessens, S., Ratnovski, L., & Singh, M. M. (2012). Shadow banking: Economics and policy (12). International Monetary Fund.
Colombini F. (1999). Strumenti derivati e intermediari finanziari. Rivista Bancaria, 1.
Colombini, F. (2004). Strumenti fuori bilancio negli intermediari bancari. La recente esperienza italiana. Rivista Bancaria, 4.
Colombini, F. (2008). Intermediari, mercati e strumenti finanziari. Economia e integrazione. Torino: Utet.
Colombini, F., & Calabrò, A. (2010). Risk management e derivatives. Strategie bancarie. Banche e Banchieri, 4.
Considine, J. (1998). Pilot exercise-pre-commitment: Approach to market risk. Economic Policy Review, No 3.
Grenadier, S. R., & Hall, B. J. (1996). Risk-based capital standards and the riskiness of bank portfolios: Credit and factor risks. Regional Science and Urban Economics, 26(3), 433–464.
Gorton, G., & Metrick, A. (2010). Regulating the shadow banking system. Brookings Papers on Economic Activity, 2010(2), 261–297.
Gunther, J. W., & Moore, R. M. (1993). The long-run relationship between bank capital and lending. In Financial Industry Studies. Federal Reserve Bank of Dallas, 3.
Johnson, H. J. (1993). Financial institutions and markets. A global perspective. New York: McGraw-Hill.
Kohn, M. (2004). Financial institutions and markets. Oxford: Oxford University Press.
Kupiec, P. H., & O’Brien, J. M. (1995, July). A pre-commitment approach to capital requirements for market risk. Finance and Economics Discussion Series, 36. Washington, DC: Board of Governors of the Federal Reserve System.
Lemma, V. (2016). The Shadow Banking System: Creating Transparency in the Financial Markets. London: Palgrave Macmillan.
Lindquist, K. G. (2004). Banks’ buffer capital: How important is risk. Journal of International Money and Finance, 23(3), 493–513.
McCormick, R. (2015). The influence of politics on regulatory and cultural change in the financial sector after the financial crisis: A UK perspective. Law and Economics Yearly Review, 4(1), 110–123.
Moore, R. R. (1992). The role of bank capital in bank loan growth: Market and accounting measures (No. 92-3). Federal Reserve Bank of Dallas.
Pecchioli, R. M. (1987). Prudential supervision in banking. Paris: OECD.
Pozsar, Z., Adrian, T., Ashcraft, A., Boesky, H. (2012). Shadow banking. FRBNY Staff Reports, 458, 2012.
Pringle, J. J. (1974). The capital decision in commercial banks. The Journal of Finance, 29(3), 779–795.
Salhuteru, F., & Wattimena, F. (2015). Bank performance with CAMELS ratios towards earnings management practices in state banks and private banks. Advances in Social Sciences Research Journal, 2(3), 301–314.
Santomero, A. M. (1991). The bank capital issue. In Wihlborg, C., Fratianni, M., Willett T. D. (Eds.), Financial regulation and monetary arrangements after 1992. Amsterdam: North-Holland.
Saunders, A., & Cornett, M. M. (2008). Financial institutions management. A risk management approach. Boston: McGraw-Hill/Irwin.
Shaefer, S. M. (1987). The design of bank regulation and supervision: Some lessons from the theory of finance. In R. Portes & A. K. Swoboda (Eds.), Threats to international financial stability. Cambridge: Cambridge University Press.
Stein, J. C. (2010). Securitization, shadow banking & financial fragility. Daedalus, 139(4), 41–51.
Taggart, R. A., & Greenbaum, S. I. (1978). Bank capital and public regulation. Journal of Money, Credit and Banking, 10(2), 158–169.
Wang, J. C. (2017). Bank’s search for yield in the low interest rate environment: A tale of regulatory adaptation, Federal Reserve Bank of Boston.
Author information
Authors and Affiliations
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2018 The Author(s)
About this chapter
Cite this chapter
Colombini, F. (2018). Raising Capital or Improving Risk Management and Efficiency. In: Colombini, F. (eds) Raising Capital or Improving Risk Management and Efficiency?. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-71749-4_11
Download citation
DOI: https://doi.org/10.1007/978-3-319-71749-4_11
Published:
Publisher Name: Palgrave Macmillan, Cham
Print ISBN: 978-3-319-71748-7
Online ISBN: 978-3-319-71749-4
eBook Packages: Economics and FinanceEconomics and Finance (R0)