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Capital Constraints by Regulation in Europe

  • Paola Ferretti
Chapter

Abstract

This chapter aims at describing the evolution of the capital adequacy framework for banks at international scale. As known, the main reasons for the introduction of Basel III link back to the crisis and the inability of banks to adequately deal with its consequences, mainly due to operational distortions that have gradually characterised the banking business in the last decades. In order to give response to the crisis, the current framework focuses on the provision of higher-quantity and better-quality own funds, the introduction of countercyclical buffers, the discipline of rules for managing liquidity risk and the containment of leverage.

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Copyright information

© The Author(s) 2018

Authors and Affiliations

  • Paola Ferretti
    • 1
  1. 1.Department of Economics and ManagementUniversity of PisaPisaItaly

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