BCBS, in its response to the last financial crisis, has introduced deep reforms to the regulatory requirements on capital adequacy for banks (Known as Basel III). Buffers and a leverage ratio were introduced to cater those banks with sufficient high quality capital during a stress period. But...

During the recent Financial Crisis, as well as the 2010 and ongoing European Sovereign Debt Crisis, several governments had/have had to raise their debt levels in order to stabilize their economies. The principal problem attributed to sovereign debts, which is linked to their characteristics, is...

Using a database of more than 2,000 international bank M&A deals completed between 1990 and 2007 and the unique bank regulation data collected by Barth, Caprio, and Levine (2006), we analyze the effects of bank regulations on bank's cross-border M&As around the world. Results suggest that banks...

Improving commercial bank capital requirements has been a top priority on the regulatory agenda since the beginning of the 2008 financial crisis. Unfortunately, some of the information necessary to make informed decisions about capital regulation has been missing. Existing regulations establish...

Solvency Capital Requirements – or SCR – are the key numbers of Pillar I of Solvency II. Any company concerned (e.g. an insurer) must calculate a capital according to its liabilities and its assets. The resulting number gives the theoretical level of capital that provides the solvency and...

Developments since the introduction of the 1988 Basel Capital Accord have resulted in growing realisation that new forms of risks have emerged and that previously existing and managed forms require further redress. The revised Capital Accord, Basel II, evolved to a form of meta regulation – a...

The growth of microcredit worldwide along with international rules on capital requirements (Basel II) are increasing the competition between microfinance institutions (MFIs) and banks for this business segment. The bank system traditionally has relied on adequate credit scoring models to analyze...

Advanced Measurement Approach (AMA) has been addressed by the Basel Committee in document International Convergence of Capital Measurement and Capital Standards. Financial institutions must meet certain criteria to obtain regulatory approval.This paper proposes a logical structure to quantify...

The use of complex and sophisticated financial instruments, such as derivatives, in the modern financial environment, has triggered the emergence of new forms of risks. As well as the need to manage such types of risks, this paper investigates developments which have instigated the Basel...

We use data on UK banks' minimum capital requirements to study the interaction of monetary policy and capital requirement regulation. UK banks were subject to both time-varying capital requirements and changes in interest rate policy. Tightening of either capital requirements or monetary policy...