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Subordinated debt as bank capital: a proposal for regulatory reform

Author

Listed:
  • 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
    as

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    References listed on IDEAS

    as
    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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    5. Shadow Financial Regulatory Committee, 2000. "Reforming Bank Capital Regulation: A Proposal by the U.S. Shadow Financial Regulatory Committee," Books, American Enterprise Institute, number 920273, September.
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    8. George J. Benston & George G. Kaufman, 1998. "Deposit insurance reform in the FDIC Improvement Act: the experience to date," Economic Perspectives, Federal Reserve Bank of Chicago, vol. 22(Q II), pages 2-20.
    9. Jones, David, 2000. "Emerging problems with the Basel Capital Accord: Regulatory capital arbitrage and related issues," Journal of Banking & Finance, Elsevier, vol. 24(1-2), pages 35-58, January.
    10. anonymous, 1999. "Using subordinated debt as an instrument of market discipline," Staff Studies 172, Board of Governors of the Federal Reserve System (U.S.).
    Full references (including those not matched with items on IDEAS)

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