Detail How Much is Enough?; Capital   Oleh:  [s.n] Jenis: Article from Bulletin/Magazine Dalam koleksi: The Economist (http://search.proquest.com/) vol. 399 no. 8733 (May 2011), page 9-13. Topik: Central Banks; Monetary Policy; Capital Formation Ketersediaan Perpustakaan Pusat (Semanggi) Nomor Panggil: EE29.66 Non-tandon: 1 (dapat dipinjam: 0) Tandon: tidak ada     Lihat Detail Induk Isi artikel Imagine cars with better brakes that could take the place of airbags, or aero-engines whose increased reliability could be offset by less frequent maintenance, leaving airlines about as safe as they were in the 1950s. The main aim of innovation would be not to reduce risk but to make cars or flights cheaper. The idea seems absurd, yet it has underpinned thinking about financial stability for the past three decades--and is proving remarkably persistent. At the centre of the debate about how safe banks should be is the question of how much capital they should be required to hold. Having too little capital in the system may leave it crisis-prone and in need of regular bail-outs. Too much capital, on the other hand, could result in huge swathes of the banking business becoming unprofitable. This might result in higher borrowing costs and slower economic growth, though nobody knows for sure. A more pressing danger is that money and risk will flow into more dangerous and unregulated parts of the economy, possibly making the system even less stable. The new rules on capital, known as Basel 3, try to force banks to hold a lot more capital and by requiring much of it to be in equity. In essence, they will more than triple the amount of equity that most large banks will have to hold compared with the period before the crisis. Minimum capital is to rise from 8% to 10.5% by 2019, but many banks are getting there early to show they are ready. The increase is much larger than it appears because under the new rules banks must hold at least 7% in equity, the gold standard of capital. These rules have also closed loopholes that allowed banks to hold less capital, for instance by shifting assets off their balance-sheets or classifying them as trading assets. Financial markets are leaky. Credit can flow across borders and from shadow banks, which complicates the efforts of central bankers. There is little argument that higher capital standards may slow growth, but the scale of the effect is in dispute. Opini Anda Klik untuk menuliskan opini Anda tentang koleksi ini! Kembali

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