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Regulatory Capital and the Supervision of Financial Institutions: Some Basic Distinctions and Policy Choices

  • Arturo Estrella
Chapter

Abstract

Discussion of regulatory capital for banks and other financial intermediaries has tended to focus on very detailed issues, as opposed to the general lay of the land. For instance, regulators have tended to concentrate on increasingly complex formulas designed to calculate minimum regulatory requirements.1 These formulas have traditionally been based on general reasoning, although they are increasingly dependent on statistical models. Academics, on the other hand, have focused on mathematical models that lead to explicit expressions for the optimum amount of capital for a firm, usually from the point of view of its owners or managers.2

Keywords

Credit Risk Policy Choice Capital Requirement Economic Capital Deposit Insurance 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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Copyright information

© Springer Science+Business Media New York 2001

Authors and Affiliations

  • Arturo Estrella
    • 1
  1. 1.Federal Reserve Bank of New YorkUSA

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