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The main theoretical aspects regarding the capital adequacy models

Author

Listed:
  • Constantin ANGHELACHE

    (Bucharest University of Economic Studies, Romania)

  • Dana Luiza GRIGORESCU

    (Bucharest University of Economic Studies, Romania)

  • Ștefan Gabriel DUMBRAVĂ

    (Bucharest University of Economic Studies, Romania)

Abstract

The credit institutions shall apply the measurement approach to a lesser extent to determine capital adequacy. The Basel Accords pay attention to this very aspect of capital sizing in order to be able to finance economic activities, but especially to reduce the effect of the risks caused by capital inadequacy. This study can be performed using statistical-econometric models, based on which to estimate the establishment of the necessary capital. If capital is not adequate (brought to the size of market demand), a number of risks arise that disrupt credit-based financing. Although many credit institutions have chosen the simplest method for determining the capital requirement for operational risk, efforts must be made to use the “standard approach”, thus ensuring the premises for the transition to the “advanced approach”, considered the effective form of operational risk monitoring.

Suggested Citation

  • Constantin ANGHELACHE & Dana Luiza GRIGORESCU & Ștefan Gabriel DUMBRAVĂ, 2020. "The main theoretical aspects regarding the capital adequacy models," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 0(3(624), A), pages 261-270, Autumn.
    • Handle: RePEc:agr:journl:v:3(624):y:2020:i:3(624):p:261-270
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    References listed on IDEAS

    as
    1. Mădălina Gabriela ANGHEL & Constantin ANGHELACHE & Daniel DUMITRESCU, 2016. "Investment funds and portfolio of loan guarantees as financial steps proposals to support innovative Small and Medium Enterprises," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 0(3(608), A), pages 119-126, Autumn.
    2. Mădălina Gabriela ANGHEL & Constantin ANGHELACHE & Daniel DUMITRESCU, 2016. "Investment funds and portfolio of loan guarantees as financial steps proposals to support innovative Small and Medium Enterprises," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 0(3(608), A), pages 119-126, Autumn.
    3. Donald L. Kohn, 2006. "The evolving nature of the financial system: financial crises and the role of the central bank: a speech at the Conference on New Directions for Understanding Systemic Risk, New York, New York, May 18," Speech 200, Board of Governors of the Federal Reserve System (U.S.).
    4. Constantin ANGHELACHE & Madalina-Gabriela ANGHEL & Aurelian DIACONU & Florin Paul Costel LILEA, 2017. "Operational risk – model of analysis and control," Romanian Statistical Review Supplement, Romanian Statistical Review, vol. 65(11), pages 102-107, November.
    5. Carolyn Currie, 2004. "The Potential Effect of the New Basel Operational Risk Capital Requirements," Working Paper Series 137, Finance Discipline Group, UTS Business School, University of Technology, Sydney.
    6. Gareth W. Peters & Pavel V. Shevchenko & Mario V. Wuthrich, 2009. "Dynamic operational risk: modeling dependence and combining different sources of information," Papers 0904.4074, arXiv.org, revised Jul 2009.
    7. Constantin ANGHELACHE & Marian SFETCU & Gyorgy BODO, 2017. "Analysis Of Banking Risks In The Context Of The Basel Agreements," Romanian Statistical Review Supplement, Romanian Statistical Review, vol. 65(12), pages 83-89, December.
    8. Mohamed Belhaj, 2010. "Capital Requirements For Operational Risk: An Incentive Approach," Working Papers halshs-00504163, HAL.
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