Hostname: page-component-78c5997874-fbnjt Total loading time: 0 Render date: 2024-11-03T08:27:14.744Z Has data issue: false hasContentIssue false

On the Adequacy of Bank Capital Regulation

Published online by Cambridge University Press:  06 April 2009

Extract

The group of issues that falls under the heading of bank capital adequacy has received a great deal of attention from academics, regulators, and bankers in recent years and is likely to continue as a subject for debate for many years to come. Although the traditional questions debated in the literature on capital adequacy are important and remain unresolved, this paper is not directed at them. Instead, the approach here is to examine how bank regulators operating within the existing legal structure of regulation can pursue optimal policies with respect to the regulation of bank capital.

Type
Research Article
Copyright
Copyright © School of Business Administration, University of Washington 1984

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

REFERENCES

[1]Benston, G., and Smith, C.. “A Transactions Cost Approach to the Theory of Financial Intermediation.” Journal of Finance, Vol. 31 (05 1976), pp. 215231.CrossRefGoogle Scholar
[2]Black, F.; Miller, M.; and Posner, R.. “An Approach to the Regulation of Bank Holding Companies.” Journal of Business, Vol. 51 (07 1978), pp. 379412.CrossRefGoogle Scholar
[3]Bowman, R.The Theoretical Relationship between Systematic Risk and Financial (Accounting) Variables.” Journal of Finance, Vol. 34 (06 1979), pp. 617630.CrossRefGoogle Scholar
[4]Buser, S.; Chen, A.; and Kane, E.. “Federal Deposit Insurance, Regulatory Policy, and Optimal Bank Capital.” Journal of Finance, Vol. 36 (03 1981), pp. 5160.Google Scholar
[5]Hamada, R.The Effect of a Firm's Capital Structure on the Systematic Risk of Common Stock.” Journal of Finance, Vol. 27 (1972), pp. 435452.CrossRefGoogle Scholar
[6]Kareken, J., and Wallace, N.. “Deposit Insurance and Bank Regulation: A Partial Equilibrium Exposition.” Journal of Business, Vol. 51 (07 1978), pp. 413438.CrossRefGoogle Scholar
[7]Klemkosky, R., and Martin, J.. “The Effect of Market Risk on Portfolio Diversification.” Journal of Finance, Vol. 30 (03 1975), pp. 11231128.CrossRefGoogle Scholar
[8]Leland, H., and Pyle, D.. “Informational Asymmetries, Financial Structure, and Financial Intermediation.” Journal of Finance, Vol. 32 (05 1977), pp. 371387.CrossRefGoogle Scholar
[9]Mayne, L.Supervisory Influence on Bank Capital.” Journal of Finance, Vol. 27 (06 1972), pp. 637651.CrossRefGoogle Scholar
[10]Mehta, D.; Eisemann, P.; Moses, E.; and Deschamps, B.. “Capital Structure and Capital Adequacy of Bank Holding Companies.” Journal of Banking and Finance, Vol. 3 (04 1979), pp. 522.CrossRefGoogle Scholar
[11]Merton, R.An Analytic Derivation of the Cost of Deposit Insurance and Loan Guarantees: An Application of Modern Option Pricing Theory.” Journal of Banking and Finance, Vol. 1 (06 1977), pp. 311.CrossRefGoogle Scholar
[12]Miller, M., and Scholes, M.. “Rates of Return in Relation to Risk: A Re-Examination of Some Recent Findings.” In Studies in the Theory of Capital Markets, Jensen, M. C., ed. New York: Praeger Publishing Co. (1972), pp. 6062.Google Scholar
[13]Mingo, J.Regulatory Influence on Bank Capital Investment.” Journal of Finance, Vol. 30 (09 1975), pp. 11111121.CrossRefGoogle Scholar
[14]Peltzman, S.Capital Investment in Commercial Banking and Its Relation to Portfolio Regulation.” Journal of Political Economy, Vol. 78 (01/02 1970), pp. 126.CrossRefGoogle Scholar
[15]Pettway, R.Market Tests of Capital Adequacy of Large Commercial Banks.” Journal of Finance, Vol. 31 (06 1976), pp. 865875.CrossRefGoogle Scholar
[16]Pringle, J.The Imperfect Markets Model of Commercial Bank Financial Management.” Journal of Financial and Quantitative Analysis, Vol. 9 (01 1974), pp. 6987.CrossRefGoogle Scholar
[17]Santomero, A., and Vinso, J.. “Estimating the Probability of Failure for Commercial Banks and the Banking System.” Journal of Banking and Finance, Vol. 1 (10 1977), pp. 185206.CrossRefGoogle Scholar
[18]Santomero, A., and Watson, R.. “Determining an Optimal Capital Standard for the Banking Industry.” Journal of Finance, Vol. 32 (09 1977), pp. 12671282.CrossRefGoogle Scholar
[19]Sharpe, W.Bank Capital Adequacy, Deposit Insurance, and Security Values.” Journal of Financial and Quantitative Analysis, Vol. 13 (11 1978), pp. 701718.CrossRefGoogle Scholar
[20]Short, B. “Capital Requirements for Commercial Banks: A Survey of the Issues.” IMF Staff Papers (1978).CrossRefGoogle Scholar
[21]Taggart, R., and Greenbaum, S.. “Bank Capital and Public Regulation.” Journal of Money, Credit, and Banking, Vol. 10 (05 1978), pp. 158169.Google Scholar
[22]Talmor, E.A Normative Approach to Bank Capital Adequacy.” Journal of Financial and Quantitative Analysis, Vol. 15 (11 1980), pp. 785811.CrossRefGoogle Scholar
[23]Wolkowitz, B. “Bank Capital: The Regulator versus the Market.” Board of Governors of the Federal Reserve, Research Papers (04 1978).Google Scholar