In praise of higher capital

In praise of higher capital

Many had expected the Basel Committee on Banking Supervision to show a Clint Eastwood-like steeliness last month by announcing tough new rules on regulatory capital. But it never quite happened. Instead, the committee announced unchanged total capital levels – although the capital must be of higher quality with a higher proportion of common equity.

Some national regulators will no doubt ratchet-up capital levels by adding local requirements. That is the approach the UK, for one, has always