The new Basel Capital Adequacy Accord (Basel III) is an agreement among countries' central banks and bank supervisory …, which were approved by the Basel member central bank governors on September 12, 2010. The elements are the new definition of …

capital charge for operational risk, while the most sophisticated approach, the Advanced Measurement Approaches, use a bank …

capital diverges from the actual (economic) capital held by banks. A bank's actual capital is typically linked to a target … credit rating, which is in turn determined by the probability of default. If actual capital held by the bank is allocated … bank, rather than a disciplined and consistent analysis of risk based on the entire distribution of potential outcomes …

This paper develops a framework for examining the impact of changes in the solvency standard of a bank (target credit … rating) on the pricing of bank assets. We show that the decision of a bank to increase its solvency standard increases the … price of bank assets to the extent that a bank prices its assets in order to earn a minimum return on target economic equity …

rating, the breakeven price on their asset portfolios will rise to the extent that the bank prices these assets to achieve a … minimum return on economic capital. Ceteris paribus, the increase in loan rates may make the bank uncompetitive in specific … solvency standard for a bank has two opposing effects on bank asset prices. To the extent that a bank prices its assets to …

In June 2004 the Basel Committee on Banking Supervision of the Bank for International Settlements issued its revised … use of assessments of risks provided by bank's internal systems as inputs into capital calculations. The revised framework … agenda under the perception that governing boards and senior bank executives intend to move beyond simple issues of …

empiricallybetween bank debt and non-bank debt. We find stock returns are a first orderdeterminant of capital structure. Firms do show …. Second, firms are highlylevered mainly through bank loans which render the role of dividends in reducing theagency costs less …