The Failure of Risk-Based Capital Regulation

Mercatus on Policy, No. 120, 2013

4 Pages Posted: 8 Feb 2013

See all articles by Thomas L. Hogan

Thomas L. Hogan

American Institute for Economic Research

Neil R. Meredith

West Texas A&M University

Xuhao Pan

West Texas A&M University

Date Written: January 31, 2013

Abstract

In this policy brief, we explain the fundamentals of risk-based capital (RBC) regulation and discuss some potential shortcomings of this system. We propose that the Fed end its use of RBC regulation and return to the use of simple capital ratios as measures of bank risk.

Suggested Citation

Hogan, Thomas L. and Meredith, Neil R. and Pan, Xuhao, The Failure of Risk-Based Capital Regulation (January 31, 2013). Mercatus on Policy, No. 120, 2013 , Available at SSRN: https://ssrn.com/abstract=2213636

Thomas L. Hogan (Contact Author)

American Institute for Economic Research ( email )

PO Box 1000
Great Barrington, MA 01230
United States

Neil R. Meredith

West Texas A&M University ( email )

2501 4th Avenue
WTAMU Box 60187
Canyon, TX 79016-0001
United States
806-651-2493 (Phone)

HOME PAGE: http://https://www.wtamu.edu/academics/neil-meredith-bio.aspx

Xuhao Pan

West Texas A&M University ( email )

Canyon, TX 79016
United States

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