IDEAS home Printed from https://ideas.repec.org/p/fip/fednls/101579.html
   My bibliography  Save this paper

Economic Capital: A New Measure of Bank Solvency

Author

Abstract

Bank supervisors, industry analysts, and academic researchers rely on a range of metrics to track the health of both individual banks and the banking system as a whole. Many of these metrics focus on bank solvency—the likelihood that a bank will be able to repay its obligations and thus retain its funding and continue to supply services to consumers, businesses, and other financial institutions. We draw on our recent research to describe a new solvency metric that is more forward-looking, more timely, and more comprehensive in its assessment of solvency than many current measures.

Suggested Citation

  • Beverly Hirtle & Matthew Plosser, 2025. "Economic Capital: A New Measure of Bank Solvency," Liberty Street Economics 20250903, Federal Reserve Bank of New York.
    • Handle: RePEc:fip:fednls:101579
    as

    Download full text from publisher

    File URL: https://libertystreeteconomics.newyorkfed.org/2025/09/economic-capital-a-new-measure-of-bank-solvency/
    File Function: Full text
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    ;
    ;

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:fip:fednls:101579. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Gabriella Bucciarelli (email available below). General contact details of provider: https://edirc.repec.org/data/frbnyus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.