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The Ever-evolving Basel Accord

  • Damiano Guadalupi
Part of the Palgrave Macmillan Studies in Banking and Financial Institutions book series (SBFI)

Abstract

Walter Bagehot in his Lombard Street, published in 1873, wrote, “A well-run bank needs no capital. No amount of capital will rescue a badly run bank”. Unfortunately, regulators cannot easily require banks to be “well-run” in Bagehot’s sense, so banks are required to hold capital as a backstop. Capital is not a bad substitute for perfect judgment, and at least it can be defined and measured (Davies, 2011). But how much capital is necessary to support the overall risk taken by a bank?

Keywords

Credit Risk Capital Requirement Asset Class Capital Ratio Basel Committee 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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Copyright information

© Damiano Guadalupi 2013

Authors and Affiliations

  • Damiano Guadalupi

There are no affiliations available

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