New York Fed article proposes capital regulation framework
An article published on May 25 by the Federal Reserve Bank of New York outlines a proposal for a new approach to regulating banks' capital using a "special account" in addition to core capital requirements.
The authors, Viral Acharya, Hamid Mehran, Til Schuermann and Anjan Thakor, suggest the special account should contain capital invested in Treasury securities or their equivalents. The assets would accrue to shareholders while the bank remains solvent, but to regulators, not creditors, if the
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