analysis is relevant to the debate on bank capital regulation, and complements Admati et al. (2010). In that paper we argued … for assessing regulation. Other arguments made to support claims that "equity is expensive" are flawed. Like reduction in … subsidies, the effects of leverage reduction on bank managers or shareholders do not represent a social cost. In fact, we show …

Capital regulation is critical to address distortions and externalities from intense conflicts of interest in banking … and from the failure of markets to counter incentives for recklessness. The approaches to capital regulation in Basel III …

lacking empirical support.We conclude that bank equity is not socially expensive, and that high leverage at the levels allowed … remaining challenges are addressed, capital regulation can be a powerful tool for enhancing the role of banks in the economy …

addressed by an approach to financial regulation that imports its functional foundations more vigorously into the interpretation … and implementation of existing rules. It shows that the general policy goals of prudential banking regulation remain …

Regulation of risks in banking is driven by evolution of financial intermediation and markets, and vice versa. The … banking regulation in the world, precise requirements and scope were reformed and implemented in response to crises and global … the paradigm from partial improvements under financial liberalization regime to a world-wide regulation tightening on the …

regulatory requirements. Our analytic characterization of the bank policy choices shows that imposing solely liquidity … requirements leads to lower bank losses in default at the cost of an increased likelihood of default. Combining liquidity … requirements with leverage requirements reduces drastically both the likelihood of default and the magnitude of bank losses in …

failed to influence—federal securities regulation and state corporate law, and the prospective roles for the EMH in these … contexts. In federal securities regulation, the EMH has offered a theoretical construct to accompany the general belief in the …

This paper examines whether regulation that is more conducive to competitive and efficient financial systems has a … external sources of funding tend to grow faster in countries that have more competition-friendly regulation in markets for … banking services and financial instruments. The regulatory indicators are assembled from surveys conducted by the World Bank …

III targets banks, and could restrict the availability of bank debt to the sector; the Alternative Investment Fund … European Market Infrastructure Regulation (EMIR) is aimed at derivative trading and could impact the cost of debt capital. We … across the three regulations. For Basel III we find support for the regulatory burden hypothesis of the bank lending channel …