Advertisement

Solvency, Liquidity, Asset-Backed Paper, and the Carry Trade

  • Dimitris N. Chorafas
Part of the Palgrave Macmillan Studies in Banking and Financial Institutions book series (SBFI)

Abstract

Regulators, members of the board of directors, and the public must be confident that the capital requirements of a credit institution are determined in a way that enhances safety and soundness, not only of the company itself but of the banking system as a whole. While capital adequacy regulations should neither penalize banks nor artificially distort the competitive playing field, they should assure the bank’s survival in case of crisis — precisely when core capital is the most important. In terms of capital adequacy, banks suffer from two catastrophic risks:
  • Insolvency, and

  • Illiquidity.

Keywords

Central Bank Credit Risk Credit Rating Hedge Fund European Central Bank 
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.

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

Notes

  1. 5.
    European Central Bank, Monthly Bulletin, February 2008.Google Scholar
  2. 7.
    Credit Suisse, Economics/Research Monthly, 24 April 2007.Google Scholar

Copyright information

© Dimitris N. Chorafas 2009

Authors and Affiliations

  • Dimitris N. Chorafas
    • 1
  1. 1.New York Academy of SciencesUSA

Personalised recommendations