BANK CAPITAL FORBEARANCE AND PUBLIC POLICY
作者:
GEORGE G. KAUFMAN,
期刊:
Contemporary Economic Policy
(WILEY Available online 1987)
卷期:
Volume 5,
issue 1
页码: 84-91
ISSN:1074-3529
年代: 1987
DOI:10.1111/j.1465-7287.1987.tb00248.x
出版商: Blackwell Publishing Ltd
数据来源: WILEY
摘要:
Recently, the bank regulatory agencies have adopted capital forbearance programs to permit some troubled agriculture and energy banks to operate temporarily with capital levels below the regulatory minimum requirement. In a world with federal deposit insurance and a lender of last resort, bank capital is no longer viewed by all depositors as the primary protector of their funds. Thus, they reduce their market discipline. Bank owners/ managers are likely to respond by increasing their risk exposure in an attempt to regain profitability. If they win, they keep all the gains; if they lose, the losses are passed on to the Federal Deposit Insurance Corporation (FDIC). A preferred policy is to require these banks to raise additional capital at this time or to be sold. Capital forbearance is forbearance of incumbent bank management/owners, not of bank customers.
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