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dc.contributor.authorMiles, Daviden_US
dc.contributor.authorYang, Jingen_US
dc.contributor.authorMarcheggiano, Gilbertoen_US
dc.date.accessioned2011-04-19en_US
dc.date.accessioned2011-10-24T07:51:01Z-
dc.date.available2011-10-24T07:51:01Z-
dc.date.issued2011en_US
dc.identifier.urihttp://hdl.handle.net/10419/50643-
dc.description.abstractThis paper reports estimates of the long-run costs and benefits of banks funding more of their assets with loss-absorbing capital, or equity. Measuring those costs requires careful consideration of a wide range of issues about how shifts in funding affect required rates of return and on how costs are influenced by the tax system; it also requires a clear distinction to be drawn between costs to individual institutions (private costs) and overall economic (or social) costs. Without a calculation of the benefits from having banks use more equity no estimate of costs - however accurate - can tell us what the optimal level of bank capital is. We use empirical evidence on UK banks to assess costs; we use data from shocks to incomes from a wide range of countries over a long period to assess risks to banks and how equity funding (or capital) protects against those risks. We find that the amount of equity capital that is likely to be desirable for banks to use is very much larger than banks have used in recent years and also higher than targets agreed under the Basel III framework.en_US
dc.language.isoengen_US
dc.publisherBank of England, Monetary Policy Committee Londonen_US
dc.relation.ispartofseriesExternal MPC unit discussion paper 31 [rev.]en_US
dc.subject.jelG21en_US
dc.subject.jelG28en_US
dc.subject.ddc330en_US
dc.subject.keywordbanksen_US
dc.subject.keywordcapital regulationen_US
dc.subject.keywordcapital structureen_US
dc.subject.keywordcost of equityen_US
dc.subject.keywordleverageen_US
dc.subject.keywordModigliani-Milleren_US
dc.subject.stwBanken_US
dc.subject.stwEigenkapitalen_US
dc.subject.stwFremdkapitalen_US
dc.subject.stwBankenliquiditäten_US
dc.subject.stwKapitalstrukturtheorieen_US
dc.subject.stwGroßbritannienen_US
dc.titleOptimal bank capitalen_US
dc.typeWorking Paperen_US
dc.identifier.ppn656641770en_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungenen_US
Appears in Collections:External MPC Unit Discussion Papers, Bank of England

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