We examine the pervasive view that equity is expensive which leads to claims that high capital requirements are costly …. It is thus incorrect to assume that the required return on equity remains fixed as capital requirements increase. It is … costs. Approaches based on equity dominate alternatives, including contingent capital. To achieve better capitalization …

How does the shadow banking system respond to changes in capital regulation of commercial banks? We propose a …. Tighter capital requirements for regulated banks cause higher liquidity premia, leading to higher shadow bank leverage and a … capital requirement is around 16% …

We propose a methodology for measuring the market-implied capital of banks by subtracting from the market value of … risk of banks with a low market capitalization. We argue that this adjusted measure of capital is the relevant market …-implied capital measure for policy makers. We propose an econometric model for the combined simulation of equity and CDS prices, which …

bank holding companies covered by the U.S. Supervisory Capital Assessment Program (SCAP), with the systemic risk indicator …