This paper gives an overview of the capital requirements for banks. Regulatory capital is analyzed, followed by the discussion of economic capital. These ideas are used to explain risk adjusted performance measures.

Based on German government bond yields, this paper analyses the performance of laddered strategies during a period of low interest rates. Relying on the REX, Germany"s leading bond index, laddered cash flows are created, and maturity structures are systematically changed. A constructed rolling...

Banks must maintain a balance between their own capital and the level of accepted aggregate risk to ensure financial stability. This paradigm is expressed in terms of capital adequacy requirements to both the minimum capital required to cover regulatory risks and the risk capital required to...

Risikomessmodelle werden als Controllinginstrumente hinsichtlich ihrer Güte oft einseitig unter reinen Risikogesichtspunkten getestet. Der Einfluss, den sie auf die Anlageperformance besitzen, wird dabei in der Regel vernachlässigt. Der vorliegende Beitrag zeigt den konzeptionellen...

We study the investor behavior on a leading peer-to-business lending platform and find evidence of two new investment biases—a default shock bias and a deep market bias. First, we find investors to stop investing in new loans and to cease from diversifying their portfolio after experiencing a...