An economic assessment of capital requirements in the banking industry

Michel Crouhy*, Dan Galai

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

11 Scopus citations

Abstract

The paper uses a two-period model to evaluate the capital requirements imposed on banks. In particular, the interaction between capital requirements and other regulatory measures is analyzed. It is shown that, in a competitive set-up, there is a tradeoff between the capital ratio and the liquidity of assets.

Original languageEnglish
Pages (from-to)231-241
Number of pages11
JournalJournal of Banking and Finance
Volume10
Issue number2
DOIs
StatePublished - Jun 1986

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