Excessive capital requirements will make markets more chaotic – Myron Scholes

Myron Scholes

Requiring banks to hold too much capital will result in more volatile financial markets, according to a Nobel prize-winning quantitative analyst.

Speaking at an event hosted by Japanese bank Nomura, Myron Scholes said setting capital requirements that are too onerous would mean banks would need too high a return for intermediating in the markets, and that as a result their "correcting influence" would be absent.

"If you restrict or require more capital of banks, what will happen is that they

To continue reading...

You need to sign in to use this feature. If you don’t have a Risk.net account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an indvidual account here: