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Subordinated debt as bank capital: a proposal for regulatory reform

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  • Douglas D. Evanoff
  • Larry D. Wall

Abstract

Industry observes have proposed increasing the role of subordinated debt in bank capital requirements as a means to increase market discipline. A recent Federal Reserve System Task Force evaluated the characteristics of such proposals. Here, the authors take the next step and offer a specific sub-debt proposal. They describe how it would operate and what changes it would require in the regulatory framework.

Suggested Citation

  • Douglas D. Evanoff & Larry D. Wall, 2000. "Subordinated debt as bank capital: a proposal for regulatory reform," Economic Perspectives, Federal Reserve Bank of Chicago, vol. 25(Q II), pages 40-53.
    • Handle: RePEc:fip:fedhep:y:2000:i:qii:p:40-53:n:v.25no.2
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    References listed on IDEAS

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    1. Gary H. Stern, 1998. "Market discipline as bank regulator," The Region, Federal Reserve Bank of Minneapolis, vol. 12(Jun), pages 2-3.
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