This paper reviews academic studies of bank capital regulation in an effort to evaluate the intellectual foundation for the imposition of the Basel I and Basel II systems of risk-based capital requirements. The theoretical literature yields general agreement about the immediate effects of...

This paper examines the market-discipline and supervisory-process "pillars" of the Basel II framework. It reviews the key features of these Basel II pillars and discusses and evaluates associated conceptual issues in relation to theoretical predictions and empirical findings in the academic...

This paper evaluates the effects of binding regulatory restraints on the rate of performance-based management compensation within a banking framework in which the primary function of bank management teams is to monitor loans in order to eliminate deadweight default losses. Available management...