This website uses cookies.

By clicking the "Accept" button or continuing to browse our site, you agree to first-party and session-only cookies being stored on your device to enhance site navigation and analyze site performance and traffic. For more information on our use of cookies, please see our Privacy Policy.

  1. Home
  2. Journals
  3. Journal of Economic Perspectives
  4. Fall 1999
  5. Restoring Banking Stability: Beyond Supervised Capital Requirements

Journal of Economic Perspectives

ISSN 0895-3309 (Print) | ISSN 1944-7965 (Online)

Restoring Banking Stability: Beyond Supervised Capital Requirements

  • Gerard Caprio
  • Patrick Honohan
Journal of Economic Perspectives
vol. 13, no. 4, Fall 1999
(pp. 43–64)
Download Full Text PDF
(Complimentary)

Abstract

Emerging economies have been particularly prone to financial sector crises, reflecting marked information asymmetries and political interference, as well as the substantial volatility in underlying economic conditions, and the vulnerability of banking and finance when structural economic changes create a new and uncharted operating environment. The standard regulatory paradigm relies mainly on supervised capital adequacy, but it may not be enough. Other measures to improve the incentive structure for bankers, regulators, and other market participants could effectively increase the number of concerned, skilled and watchful eyes. Intermittent application of supplementary "blunt instruments" could also be useful.

Citation

Caprio, Gerard, and Patrick Honohan. 1999. "Restoring Banking Stability: Beyond Supervised Capital Requirements." Journal of Economic Perspectives, 13 (4): 43–64. DOI: 10.1257/jep.13.4.43

JEL Classification

  • G21 Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
  • O16 Economic Development: Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
There are no comments for this article.
Login to Comment