Consider banks capital requirements.

The best known tools for this are margin requirements and minimum capital requirements.

The United States is emphasizing higher capital requirements.

Smarter capital requirements better Basel rules aren t the answer.

Counter cyclical capital requirements fit with this idea, and a range of indicators could be used to calibrate the increase in capital requirements, coupled perhaps with some discretion.

At the source, capital requirements for currency mismatches in portfolios, together with margin requirements on foreign exchange derivatives, make sense.

Similarly, banks would have incentives to game capital adequacy requirements by manipulating how capital and assets are defined.

All this financial engineering would avoid the obsolete capital requirements that burden banks operation.

There have been some increases in capital requirements but far short of what is needed.

There seems to be little appetite for proposals to vary capital adequacy requirements counter cyclically.

Requirements

These requirements are usually called the Recommended Requirements.

Form requirements

Recommendation requirements

Banks will have to recognize the losses and, if necessary, find the additional capital to meet reserve requirements.

Today s sophisticated financial engineering can render the calculation of margin and capital requirements extremely difficult, if not impossible.

If a tightening of margin and minimum capital requirements does not deflate a bubble, regulators can tighten some more.

The capital requirements attached to that subsidiary would be more burdensome, with minimum Tier One capital set at 10 , compared to the new Basel 3 standard of 7 .

Combined with elevated capital requirements for banks, it would reduce the chance of another simultaneous failure of all credit channels.

High capital and provision requirements for certain transactions, or prohibition of such transactions, should also be introduced for prudential reasons.

Banks know that they face higher capital requirements, which will force them to scale back lending relative to their resources).

We need to ensure transparency and adequate risk management, measures on which are part of my proposal on capital requirements.

The current European and global frameworks for accounting standards and capital requirements, for example, have exacerbated turmoil in the markets.

Much tougher capital requirements for trading book exposures are therefore needed and will be brought forward as soon as possible.

Similarly, banks would have incentives to game capital adequacy requirements by manipulating how capital and assets are defined. Indeed, investment banks like Goldman Sachs and Barclays Capital are already inventing new types of securities to reduce the capital cost of holding risky assets.

Reckless balance sheet expansion in pursuit of profit is kept in check if financial companies adhere to statutory capital requirements, which mandate a capital asset ratio of about 8 .

Over time, however, the interest rate premium is likely to be small, because higher capital requirements and contingent capital should significantly reduce the likelihood of ever reaching the triggers.

With respect to financial supervision, there has been increasing support since the crisis for countercyclical capital requirements, at least for banks.

The G 20 has now called for revising the Basel II standards so that capital requirements become countercyclical, and Spain s experience with such requirements suggests that doing so is a step in the right direction.

To avoid an additional credit crunch as banks deleverage, banks should be given some short term forbearance on capital and liquidity requirements.

That s why I have proposed much tougher measures in the revised Capital Requirements Directive amendments now being considered by the European Parliament.

General requirements for writing posts

Even more importantly, policies can discourage foreign borrowing led consumption booms by taxing capital inflows (Chilean style) or increasing financial intermediaries liquidity requirements.

At the source, capital requirements for currency mismatches in portfolios, together with margin requirements on foreign exchange derivatives, make sense. Non deliverable forward contracts should be subject to close regulation and supervision in both source and destination countries.

What are the requirements for dynamism?

8. Reporting requirements for full disclosure

For example, capital charges should account for the degree of friction and rivalry in the banking sector, with tighter requirements in more competitive contexts.

I came to realize that the political answer to this crisis must encompass more than improved regulatory regimes, risk management strategies, and capital requirements.

This issue aside, I have never been persuaded that capital requirements on trading books should be materially lower than for those on banking books.

They have considerable flexibility, owing to a range of policy tools, including variable capital and reserve requirements and direct controls on mortgage lending terms.

For example, capital charges should account for the degree of friction and rivalry in the banking sector, with tighter requirements in more competitive contexts.

Bankers, who may really be worried about their own bonuses, warn that higher capital requirements will force them to curtail lending, thus impeding economic growth.

Within the ACD framework, Thaksin launched the 1 billion Asia Bond last year in an effort to match Asia s financial capital with its financing requirements.

Most important, macroprudential regulation has been added to policymakers toolkit simply put, it makes sense to vary banks capital requirements according to the financial cycle.

When credit expansion is rapid, it may be appropriate to increase banks capital requirements as a hedge against the heightened risk of a subsequent contraction.