It has been argued that higher capital requirements are not expensive for the banking system, by exploiting a renewed edition of a standard argument from corporate finance, the Modigliani-Miller theorem (1958 and 1963). However, the M&M model must be carefully analysed before endorsing the...

This paper offers a critical survey of the swings in banking regulation, notably with reference to leverage and Risk-Weighted Ratios (RWR). At the outset, a distinction is made between economic and Regulatory Capital (ReC) and between private and social costs/benefits of equity finance for...

This paper offers a critical survey of the swings in banking regulation, notably with reference to leverage and risk weighted ratios. At the outset the distinction is made between economic and regulatory capital and between private vs social costs/benefits of equity finance for banking firms....