BASEL STUDY OF BANKING SYSTEM:PAUL S. CALEM, PH.D.

From: Congressional Testimony | Date: May 11, 2005 | Copyright information

Congressional Testimony
05-11-2005
last row provides an estimate of the amount of Tier 1 capital
that would be required for an adopter with an average portfolio
of high quality mortgages that are well-diversified
geographically. The amount is 40 basis points, which is one fifth
of the 200 bps that would be required by nonadopters, all else
equal. For some risk segments the difference is larger and for
some others it is smaller.
C. How regulatory capital rules can impact bank investment
decisions
We have now established how capital costs can influence the cost
of mortgage investing and that Basel II ...

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