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.

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

These trends imply an increased probability that the market is underestimating risk, so systemic risk regulators should raise minimum capital requirements as soon as they spot them.

Smarter capital requirements better Basel rules aren t the answer.

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

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.

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.

First, capital requirements should be set as a straightforward ratio of common equity to total assets, thereby abandoning all reference to banks own risk management models.

And, clearly, the idea that capital requirements were not needed for banks off balance sheet activities (because the banks were not bearing the risk), was simply wrong.

This approach has the added advantage of preventing different risk profiles and their appropriate capital requirements from getting mixed up in the same entity and balance sheet.

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

They will need to strengthen international guidelines for capital requirements for large multinational banks and address the perverse financial incentives that led to irresponsible risk taking in the financial sector.

The banks are now content to leave those funds at the Fed, where they earn a mere 0.25 because they are risk free, completely liquid, and unburdened by capital requirements.

He is based in Dar es Salaam, Tanzania's commercial capital.

These requirements are usually called the Recommended Requirements.

Form requirements

Recommendation requirements

The Germans, for example, want to reduce risk by forcing hedge funds to adhere to stricter reporting requirements.

Indeed, because standard measures of the probability of default fall when the economy is doing well and rise when it is not, capital requirements based on these measures tend to be pro cyclical.

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.

Why would they risk losses in their massive portfolio of dollar based assets?

It is based on freedom of movement of goods, services, capital, and people.

Rather than holding an investment in our bodies, we re all at risk of becoming capital my body, but somebody else s capital.

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

Among these costs are the difficulty of raising capital and excessive risk for employees.

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 .

This approach implies that more can be done to reduce systemic risk, beyond reforming how risk is measured and capital buffers determined.

The new margin requirements for derivatives, introduced in order to reduce systemic risk, are one example of such a chokepoint.

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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).

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.

The model advocated by Western Europe and embraced by Eastern Europe has been based on the idea that capital should flow from capital rich to capital poor countries.

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 .