This paper examines how the risk based capital standards, the so-called Basle Accord between 1990 and 1993. As the Japanese stock prices fell, banks' latent capital gains, which are part of tier II capital, became smaller. Empirical findings are consistent with a view that banks with lower...

Using data from Japanese commercial banks during 2002-2012, we explore the relationship between banks' choice of capital buffers and prevailing macroeconomic conditions. We find a positive relationship between capital buffers and the phase of the business cycle, and further find that this...

This paper examines how the risk based capital standards, the so-called Basle Accord between 1990 and 1993. As the Japanese stock prices fell, banks' latent capital gains, which are part of tier II capital, became smaller. Empirical findings are consistent with a view that banks with lower...