With respect to institutions, the requirement put forward by academics and regulators that – especially systemic banks – build up a capital cushion in good times that protects them from insolvency in bad times. – However, it is argued that – already the real-time determination of upswings and downswings in the credit cycle poses major problems even for central bank experts, because clear-cut, generally applicable (over each economic cycle), there are hardly any clear-cut, universally applicable (applicable over each economic cycle), empirically feasible and thus meaningful indicators available, and – there is no reliable clear procedure to determine how capital requirements should be clocked with the credit cycle. – Bank testament, capital ratio, regulatory, own funds, insolvency cases.
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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
Professor Dr. Eckehard Krah, Dipl.rer.pol.
E-mail address: info@ekrah.com
https://de.wikipedia.org/wiki/Gerhard_Ernst_Merk
https://www.jung-stilling-gesellschaft.de/merk/
https://www.gerhardmerk.de/