Miles warns too much weight placed on untried regulations
TLAC and the resolution regime may not be enough to substitute for higher capital
Regulators have put too much faith in complex, untried parts of the post-crisis capital structure when imposing higher requirements for bank equity could have been a simpler and more robust approach, David Miles said today (July 4).
The former Bank of England official said rules such as total loss-absorbing capacity (TLAC) and the resolution framework had been drafted in to compensate for minimum levels of risk-weighted capital that were below estimates of the socially optimum level.
“Why
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