Bank capital requirements would entail large social costs if they made resource allocation suboptimal and banking services costly by unduly limiting the banks' ability to lend. This paper considers three main factors that may make capital requirements relevant, namely, deposit insurance...

June 2000 - The Basel Committee has proposed linking capital asset requirements for banks to the banks' private sector ratings. Doing so would reduce the capital requirements for banks that lend prudently in high-income countries; the same incentives would not apply in developing countries....

Purpose - This paper investigates the role of market structure and institutional quality in determining bank capital ratios in developing economies. Design/methodology/approach - The generalised methods of moment technique is used to control for auto-correlation and endogeneity in a sample of 79...