Interconnectivities and regulatory impact [38]

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Bullet points include: Customer liabilities potentially uncovered (hence made good by protection schemes?) if large enough adverse move in assets versus liabilities Asset portfolio Secured debt Customer liabilities Unsecured debt, e.g. Tier 1, Tier 2 capital Equity Banks issue debt of various subordinations, with different costs of capital Regulators view primary role of capital as absorbing unexpected losses; capital requirements reflect effectiveness of different types of capital in different situations

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