NY Fed paper proposes two-tier capital model
A New York Federal Reserve paper published in April adopts a two-tier capital requirement model to address banks' leverage dilemma.
Viral Acharya, Hamid Mehran, Til Schuermann and Anjan Thakor, the paper's authors, examine the issue of the privately-optimal capital structure decisions of banks and the circumstances under which it is not adequate from a prudential standpoint for regulators to rely on these privately-optimal choices in designing capital regulation.
Acharya, Mehran, Schuermann and
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