Capital

<body onLoad="MM_checkPlugin('Shockwave Flash','','http://www.riskglossary.com/default_nofl.htm',false);return document.MM_returnValue" stylesrc="../_private/template.htm" bgcolor="#FFFFFF" link="#669933" vlink="#000000" alink="#000000"> <div align="left"> <table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%" id="table1"> <tr> <td width="740"> <table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%" height="37" id="table2"> <tr> <td height="35" width="100%"> <table border="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%" cellpadding="0" id="table3"> <tr> <td width="100%" align="left" valign="top"> <p class="header_gold">Capital</td> <td width="45" align="right" valign="bottom"> <map name="FPMap6"> <area href="http://www.contingencyanalysis.com" shape="rect" coords="1, 0, 44, 11" target="_top"> </map> <img border="0" src="../images/home.gif" usemap="#FPMap6" width="45" height="12"></td> </tr> </table> </td> </tr> <tr> <td width="100%" bgcolor="#CC9966" height="2"> <img border="0" src="../images/blank_2x2.gif" width="2" height="2"></td> </tr> <tr> <td width="0%" valign="top" bgcolor="#FFFFCC"> <table border="0" style="border-collapse: collapse" bordercolor="#111111" width="100%" cellpadding="0" cellspacing="1" id="table4"> <tr> <td width="0%" align="left" valign="top"> <p class="header2_black">Explained:<br> <img border="0" src="../images/blank_1x100.gif" width="100" height="1"></td> <td width="100%" align="left" valign="top"><p class="word_list"> <a href="#Capital">capital</a><p class="word_list"> <a href="#capital allocation">capital allocation</a><p class="word_list"> <a href="#capital charges">capital charge</a><p class="word_list"> <a href="#capital ratio">capital ratio</a><p class="word_list"> <a href="#risk-adjusted capital ratios">risk-adjusted capital ratio</a><p class="word_list"> <a href="#risk-based capital">risk-based capital</a><br> <img border="0" src="../images/blank_1x160.gif" width="160" height="1"></td> </tr> </table> </td> </tr> </table> <table border="0" cellpadding="0" style="border-collapse: collapse" bordercolor="#111111" width="310" align="right" id="table5"> <tr> <td align="right" width="9" height="14"></td> <td width="300" height="14"> <font size="2"> </font><font size="4"> </font></td> </tr> <tr> <td align="right" width="9"> </td> <td width="300"> <script type="text/javascript"></script> <script type="text/javascript" src="http://pagead2.googlesyndication.com/pagead/show_ads.js"> </script>  </td> </tr> </table> <p class="body"><b><a name="Capital">Capital</a></b> is one of the most fundamental concepts in finance. It is also one of the most elusive. Capital is the value of a firm or other investment—it is the value of assets less the value of liabilities. As such, it represents financial resources that are available to absorb unforeseen losses. Investors and regulators are interested in capital because a firm without capital is insolvent. The more capital a firm has relative to its assets, the more confident stakeholders are that it will meet its obligations to them. Of course, capital alone is no guarantee of solvency. A well capitalized firm can fail due to a lack of <a href="../articles/liquidity.htm">liquidity</a>.</p> <p class="body">We may sometimes think of capital as the liquidation value of a firm. If all the assets and liabilities of a firm were liquidated, how much money would be left over for <a href="../articles/common_stock.htm">equity</a> investors? Of course, liquidating a firm can be a costly undertaking, so most firms are worth more to equity investors as a going concern than they are liquidated. It is complications like this that make capital an elusive notion. The challenge is to measure capital in a way that is both precise and relevant.</p> <table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="345" align="left" id="table6"> <tr> <td width="336"> <script type="text/javascript"></script> <script type="text/javascript" src="http://pagead2.googlesyndication.com/pagead/show_ads.js"> </script>  </td> <td width="9"> </td> </tr> </table> <p class="body">According to accountants, capital is <a href="../articles/valuation.htm">book-value</a> assets less book-value liabilities, perhaps with adjustments for off-balance-sheet items. This accounting definition is precise, but it is not always relevant. A firm's assets may comprise un-depreciated investments in obsolete technology or "goodwill." A firm may have suffered a large <a href="../articles/valuation.htm">mark-to-market</a> loss but be gradually accruing it over a ten year period. Even ignoring liquidation costs, such firms might have a liquidation value that is substantially less than the accounting value of their capital. </p> <p class="body">A different <a href="../articles/risk_metric_and_risk_measure.htm">measure</a> of capital is the <a href="../articles/valuation.htm">market value</a> of the firm's equity. For a firm with a single class of <a href="../articles/common_stock.htm">stock</a>, this equals the number of <a href="../articles/common_stock.htm">shares</a> outstanding multiplied by the current stock price. Unencumbered by accounting formalism, market value of equity reflects the market's assessment of the firm's value. Of course, stock prices are subject to human emotions and crowd mentality. A firm's stock price may fluctuate widely without any fundamental change in its business' prospects. If the stock market soars with a speculative bubble or crashes amidst a panic, this says little about the fundamental value of the firm. </p> <p class="body">Regulators and <a href="../articles/risk_management.htm">risk managers</a> think of capital as financial resources available to, in some sense, absorb unanticipated losses. From this perspective, capital is those sources of funding that protect parties with claims on the firm's assets from such losses. It can be controversial deciding which items to include in this definition. These might include owners' equity, retained earnings and long-term subordinated debt.</p> <p class="body">Once we settle on a definition of capital, a next step is to determine how much capital a firm should have. Traditionally, this question was answered for financial institutions in terms of their <a name="capital ratio"><b>capital ratio</b></a>, which is defined in terms of the book value of capital and assets as</p> <table border="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%" cellpadding="0" height="36" id="table7"> <tr> <td width="100%" align="center"> <img border="0" src="../formulas/capita1.gif" width="143" height="41"></td> <td width="5%" align="right">[1]</td> </tr> </table> <p class="body">Financial institutions tend to have capital ratios in the range of 4% to 10%, depending of course on the definition of capital being used.</p> <p class="body">Deregulation during the 1970s and 1980s exposed financial institutions to increased <a href="../articles/risk.htm">risk</a>. In this environment, capital became more important as a buffer against losses. The more risk a firm took, the more capital it needed. Because assets is a poor indicator of risk, regulators and practitioners started modifying the traditional capital ratio or abandoning it completely.</p> <p class="body">Modifications took the form of <b> <a name="risk-adjusted capital ratios">risk-adjusted capital ratios</a></b>:</p> <table border="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%" cellpadding="0" height="36" id="table8"> <tr> <td width="100%" align="center"> <img border="0" src="../formulas/capita2.gif" width="317" height="43"></td> <td width="5%" align="right">[2]</td> </tr> </table> <p class="body">where risk-adjusted assets are calculated by applying risk-based weights to specific assets and summing the results. This was the approach employed by the <a href="../articles/basle_committee.htm">1988 Basel Accord</a>. Somewhat crudely, it applied weights, including</p> <table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="345" align="left" id="table9"> <tr> <td width="336">  <p style="margin-top: 8; margin-bottom: 2" class="ad_legend"> <a target="_top" href="http://www.riskexpertise.com/link/advertising.htm"> <font color="#000000">Ads by Contingency Analysis</font></a></p> <p style="margin-top: 0; margin-bottom: 0"> <iframe src="http://servedbyadbutler.com/adserve/;ID=147917;size=336x265;setID=82402;type=iframe" style="margin: 0px; padding: 0px; border-width: 0px" width="336" height="265" frameborder="0" marginwidth="0" marginheight="0" scrolling="no" name="I1"> <![if lt IE 4]> <script src="http://servedbyadbutler.com/adserve/;ID=147917;size=336x265;setID=82402;type=js" type="text/javascript"> </script> <noscript> <a href="http://servedbyadbutler.com/go2/;ID=147917;size=336x265;setID=82402"> <img src="http://servedbyadbutler.com/adserve.ibs/;ID=147917;size=336x265;setID=82402;type=img" border="0" height="265" width="336" alt=""></a> </noscript><![endif]></iframe>   </td> <td width="9"> </td> </tr> </table> <p class="bullet"><img border="0" src="../images/bullet.gif" width="20" height="10">0% for <font face="Times New Roman"> G-10 government debt</font></p> <p class="bullet"><img border="0" src="../images/bullet.gif" width="20" height="10">20% for <font face="Times New Roman"> G-10 bank debt</font></p> <p class="bullet"><img border="0" src="../images/bullet.gif" width="20" height="10">100% for <font face="Times New Roman"> corporate debt and the debt of non-G-10 governments</font></p> <p class="body">In other cases, regulators and practitioners abandoned the capital ratio concept completely and focused instead on directly quantifying a firm's risks and specifying capital requirements in terms of the results. During the 1980s and 1990s, this work contributed to the development of concepts such as <a href="../articles/value_at_risk.htm">value-at-risk</a> (VaR) and <a href="../articles/portfolio_credit_risk.htm">portfolio credit risk modeling</a>, which make it possible to assign incremental <b> <a name="capital charges">capital charges</a></b> to individual transactions or business lines.</p> <p class="body">For example, in certain circumstances, the <a href="../articles/basle_committee.htm">Basel Accords</a> require a bank to calculate the 10-day 99% VaR for its <a href="../articles/basle_committee.htm">trading book</a>. A capital charge equal to three times this value is then applied for the trading book's <a href="../articles/market_risk.htm">market risk</a>. </p> <p class="body">Once they are calculated, individual capital charges are summed, perhaps with an adjustment to reflect <a href="../articles/hedging_and_diversification.htm"> hedging</a> or <a href="../articles/hedging_and_diversification.htm">diversification</a> effects. A firm needs to have capital in excess of its sum capital charges. This is called a <a name="risk-based capital"><b>risk-based capital</b></a> requirement to distinguish it from the assets-based requirements obtained with capital ratios</p> <table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="165" align="right" id="table10"> <tr> <td width="11"> </td> <td width="160"> <script type="text/javascript"></script> <script type="text/javascript" src="http://pagead2.googlesyndication.com/pagead/show_ads.js"> </script> </td> </tr> </table> <p class="body">Over the years, regulators have formalized risk-based capital requirements in various regulations. These have defined rules for calculating a firm's capital and suitable capital charges. The goal is to ensure that a firm has sufficient capital to remain solvent in the face of losses that might arise from risks taken by the firm. These analyses are called <a href="../articles/regulatory_capital.htm">regulatory capital</a> calculations. They have been employed in both the <a href="../articles/basle_committee.htm">1996 amendment</a> to the Basel Accord and <a href="../articles/basle_committee.htm">Basel II</a>.</p> <p class="body">Practitioners have used risk-based capital calculations to support performance assessment and decision making within financial firms. The idea is to assign capital charges to individual business lines or transactions based on their risk. Performance is assessed by comparing the profitability of a business line or transaction to its capital charge. Some metric of a business line's or transaction's <a href="../articles/economic_capital.htm">return on capital</a> can then be calculated. With this paradigm, a financial institution will pursue those businesses or transactions that offer the highest return on capital. In a sense, senior management becomes like venture capitalists, deciding in what ventures to invest their limited capital. The process is called <b><a name="capital allocation">capital allocation</a></b>. </p> <p class="body">Conceivably, firms might perform such capital allocation based on the formulas for capital and capital charges specified by applicable regulations. While some firms have done this, most have not. The problem is that regulatory capital and regulatory capital charges are designed for more modest goals than analyzing specific business lines or transactions. They generally don't make fine distinctions between the riskiness of similar but modestly different transactions. For example, the 1988 Basel Accord assigned a uniform 8% capital charge for all corporate debt—so banks would have to hold as much capital for debt issues to a AA-<a href="../articles/credit_risk.htm">rated</a> borrower as a BB-rated borrower. For this reason, financial institutions have developed their own proprietary formulas for capital and capital charges. To distinguish these from regulatory capital calculations—and to emphasize their purpose of more accurately capturing the economic impact of specific business lines or transactions—these are referred to as <a href="../articles/economic_capital.htm">economic capital</a> calculations.</p> <p class="body">While economic and regulatory capital calculations are defined differently and serve largely different purposes, the two are philosophically similar. They have evolved together over the years. Regulators have borrowed concepts from the economic capital calculations performed by banks. Economic capital calculations have similarly benefited from the innovations of regulators.</p> <table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%" id="table11"> <tr> <td height="30" valign="bottom" colspan="2"> <p class="header2_black">Related Internal Links</td> </tr> <tr> <td colspan="2" bgcolor="#CC9966" height="2"> <img border="0" src="../images/blank_2x2.gif" width="2" height="2"></td> </tr> <tr> <td bgcolor="#FFFFCC" colspan="2"> <table border="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%" cellpadding="6" id="table12"> <tr> <td width="100%"> <p class="explanatory_text"> <img border="0" src="../images/bullet_link_glossary.gif" width="26" height="15"><a href="../articles/basle_committee.htm">Basel Committee</a> A committee of representatives from central banks and regulatory authorities that has played a leading role in standardizing bank regulations across jurisdictions.<p class="explanatory_text"> <img border="0" src="../images/bullet_link_glossary.gif" width="26" height="15"><a href="../articles/corporate_risk_management.htm">corporate risk management</a> Practices that serve to optimize risk taking in a context of book value accounting.<p class="explanatory_text"> <img border="0" src="../images/bullet_link_glossary.gif" width="26" height="15"><strong style="font-weight: 400"><a href="../articles/economic_capital.htm">economic capital</a> </strong> Capital held for economic (as opposed to regulatory) purposes.<p align="left" class="explanatory_text"> <img border="0" src="../images/bullet_link_glossary.gif" width="26" height="15"><a href="../articles/economic_profit.htm">economic profit</a> Profit in excess of the opportunity cost of capital.</p> <p class="explanatory_text"> <img border="0" src="../images/bullet_link_glossary.gif" width="26" height="15"><a href="../articles/european_financial_regulation.htm">European financial regulation</a> An overview.<p class="explanatory_text"> <img border="0" src="../images/bullet_link_glossary.gif" width="26" height="15"><a href="../articles/risk_management.htm">financial risk management</a> Practices by which a firm optimizes the manner in which it takes financial risk.<p class="explanatory_text"> <img border="0" src="../images/bullet_link_glossary.gif" width="26" height="15"><a href="../articles/leverage.htm">leverage</a> Debt financing or anything that can similarly magnify the risk and reward of an investment.</p> <p class="explanatory_text"> <img border="0" src="../images/bullet_link_glossary.gif" width="26" height="15"><a href="../articles/par_value.htm">par value</a> A stated value for a security.<p class="explanatory_text"> <img border="0" src="../images/bullet_link_glossary.gif" width="26" height="15"><strong style="font-weight: 400"><a href="../articles/regulatory_capital.htm">regulatory capital</a> Capital held in accordance with statutory or regulatory requirements.</strong><p class="explanatory_text"> <img border="0" src="../images/bullet_link_glossary.gif" width="26" height="15"><a href="../articles/united_states_financial_regulation.htm">United States financial regulation</a> <i>An overview.</i></td> </tr> </table> </td> </tr> <tr> <td height="30" valign="bottom" colspan="2"> <p class="header2_black">Sponsored Links</td> </tr> <tr> <td colspan="2" bgcolor="#CC9966" height="2"> <img border="0" src="../images/blank_2x2.gif" width="2" height="2"></td> </tr> <tr> <td bgcolor="#FFFFCC" width="75"> <img border="0" src="../images/ad_side_banner_2.jpg" width="103" height="285"></td> <td bgcolor="#FFFFCC" width="99%">  <p class="ad_legend" style="margin-left: 0; margin-bottom:2"> <a target="_top" href="http://www.riskexpertise.com/link/advertising.htm"> <font color="#000000">Ads by Contingency Analysis</font></a></p> <p style="margin-top: 0; margin-bottom: 0"> <iframe src="http://servedbyadbutler.com/adserve/;ID=147917;size=336x265;setID=82436;type=iframe" style="margin: 0px; padding: 0px; border-width: 0px" width="336" height="265" frameborder="0" marginwidth="0" marginheight="0" scrolling="no" name="I2"> <![if lt IE 4]> <script src="http://servedbyadbutler.com/adserve/;ID=147917;size=336x265;setID=82436;type=js" type="text/javascript"> </script> <noscript> <a href="http://servedbyadbutler.com/go2/;ID=147917;size=336x265;setID=82436"> <img src="http://servedbyadbutler.com/adserve.ibs/;ID=147917;size=336x265;setID=82436;type=img" border="0" height="265" width="336" alt=""></a> </noscript><![endif]></iframe>   </td> </tr> <tr> <td height="30" valign="bottom" colspan="2"> <p class="header2_black">Related Books</td> </tr> <tr> <td colspan="2" bgcolor="#CC9966" height="2"> <img border="0" src="../images/blank_2x2.gif" width="2" height="2"></td> </tr> <tr> <td bgcolor="#FFFFCC" colspan="2"> <table border="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%" cellpadding="6" id="table13"> <tr> <td width="100%"> <p class="explanatory_text">Although somewhat dated, Uyemura and Van Deventer (<a target="_blank" href="http://www.riskbook.com/link/uyemura_and_van_deveneter.htm">1993</a>) remains an outstanding, very popular book. It discusses both regulatory and economic capital calculations in a manner that will appeal to senior managers or board members of commercial banks. Matten (<a target="_blank" href="http://www.riskbook.com/link/matten_c_(2000).htm">2000</a>) is the definitive non-technical text on bank capital calculations. Belmont (<a target="_blank" href="http://www.riskbook.com/link/belmont_david_(2004).htm">2004</a>) offers a focused discussion of economic capital. For regulatory capital, see Gup (<a target="_blank" href="http://www.riskbook.com/link/gup_benton_(2004).htm">2004</a>). This edited collection is about Basel II, but it goes well beyond that topic, exploring regulatory capital generally.</p> <table border="0" cellpadding="4" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%" id="table14"> <tr> <td width="100" align="left" valign="top"> <map name="FPMap475"> <area target="_blank" href="http://www.riskbook.com/link/uyemura_and_van_deveneter.htm" shape="rect" coords="0, 0, 81, 124"> </map> <img border="0" src="../images/book_uyemura_(1993)_125.gif" usemap="#FPMap475" width="82" height="125"></td> <td align="left" valign="top"> <table border="0" cellpadding="1" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%" id="table15"> <tr> <td width="90%" colspan="3"> <p class="title"> <a target="_blank" href="http://www.riskbook.com/link/uyemura_and_van_deveneter.htm"> Financial Risk Management in Banking</a></td> </tr> <tr> <td colspan="3"> <p class="author"><b>D. Uyemura and D. Van Deventer</b></td> </tr> <tr> <td width="10%"> <map name="FPMap484"> <area target="_blank" href="http://www.riskbook.com/main/ratings.htm" shape="rect" coords="0, 1, 89, 16"> </map> <img border="0" src="../images/star_5.gif" usemap="#FPMap484" width="90" height="16"></td> <td width="10%" class="author">quality</td> <td width="70%"> <p class="author"> </td> </tr> <tr> <td width="10%"> <map name="FPMap485"> <area target="_blank" href="http://www.riskbook.com/main/ratings.htm" shape="rect" coords="0, 0, 89, 15"> </map> <img border="0" src="../images/tech_2.gif" usemap="#FPMap485" width="90" height="16"></td> <td width="10%" class="author">technical</td> <td width="70%">  </td> </tr> <tr> <td width="10%"> <p class="author">1993</td> <td width="10%"> </td> <td width="70%"> <p align="center"><map name="FPMap366"> <area target="_blank" coords="0, 0, 145, 19" shape="rect" href="http://www.riskbook.com/link/uyemura_and_van_deveneter.htm"> </map> <img border="0" src="../images/pointer_review.gif" usemap="#FPMap366" width="146" height="20"></td> </tr> </table> </td> </tr> </table> <table border="0" cellpadding="4" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%" id="table16"> <tr> <td width="100" align="left" valign="top"> <map name="FPMap478"> <area target="_blank" href="http://www.riskbook.com/link/matten_c_(2000).htm" shape="rect" coords="0, 0, 82, 124"> </map> <img border="0" src="../images/book_matten_chris_(2000)_125.jpg" usemap="#FPMap478" width="83" height="125"></td> <td align="left" valign="top"> <table border="0" cellpadding="1" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%" id="table17"> <tr> <td width="90%" colspan="3"> <p class="title"> <a target="_blank" href="http://www.riskbook.com/link/matten_c_(2000).htm"> Managing Bank Capital</a></td> </tr> <tr> <td colspan="3"> <p class="author"><b>Chris Matten</b></td> </tr> <tr> <td width="10%"> <map name="FPMap474"> <area target="_blank" href="http://www.riskbook.com/main/ratings.htm" shape="rect" coords="0, 1, 89, 16"> </map> <img border="0" src="../images/star_5.gif" usemap="#FPMap484" width="90" height="16"></td> <td width="10%" class="author">quality</td> <td width="70%"> <p class="author"> </td> </tr> <tr> <td width="10%"> <map name="FPMap427"> <area target="_blank" href="http://www.riskbook.com/main/ratings.htm" shape="rect" coords="0, 0, 89, 15"> </map> <img border="0" src="../images/tech_2.gif" usemap="#FPMap485" width="90" height="16"></td> <td width="10%" class="author">technical</td> <td width="70%">  </td> </tr> <tr> <td width="10%"> <p class="author">2000</td> <td width="10%"> </td> <td width="70%"> <p align="center"><map name="FPMap477"> <area target="_blank" coords="0, 0, 145, 19" shape="rect" href="http://www.riskbook.com/link/matten_c_(2000).htm"> </map> <img border="0" src="../images/pointer_review.gif" usemap="#FPMap477" width="146" height="20"></td> </tr> </table> </td> </tr> </table> <table border="0" cellpadding="4" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%" id="table18"> <tr> <td width="100" align="left" valign="top"> <map name="FPMap480"> <area target="_blank" coords="0, 0, 84, 124" shape="rect" href="http://www.riskbook.com/link/belmont_david_(2004).htm"> </map> <img border="0" src="../images/book_belmont_david_(2004)_125.jpg" usemap="#FPMap480" width="85" height="125"></td> <td align="left" valign="top"> <table border="0" cellpadding="1" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%" id="table19"> <tr> <td width="90%" colspan="3"> <p class="title"> <a target="_blank" href="http://www.riskbook.com/link/belmont_david_(2004).htm"> Value Added Risk Management</a></td> </tr> <tr> <td colspan="3"> <p class="author"><b>David Belmont</b></td> </tr> <tr> <td width="10%"> <map name="FPMap481"> <area target="_blank" href="http://www.riskbook.com/main/ratings.htm" shape="rect" coords="0, 1, 89, 16"> </map> <img border="0" src="../images/star_5.gif" usemap="#FPMap481" width="90" height="16"></td> <td width="10%" class="author">quality</td> <td width="70%"> <p class="author"> </td> </tr> <tr> <td width="10%"> <map name="FPMap482"> <area target="_blank" href="http://www.riskbook.com/main/ratings.htm" shape="rect" coords="0, 0, 89, 15"> </map><img border="0" src="../images/tech_2.gif" usemap="#FPMap482" width="90" height="16"></td> <td width="10%" class="author">technical</td> <td width="70%">  </td> </tr> <tr> <td width="10%"> <p class="author">2004</td> <td width="10%"> </td> <td width="70%"> <p align="center"><map name="FPMap483"> <area target="_blank" coords="0, 0, 145, 19" shape="rect" href="http://www.riskbook.com/link/belmont_david_(2004).htm"> </map> <img border="0" src="../images/pointer_review.gif" usemap="#FPMap483" width="146" height="20"></td> </tr> </table> </td> </tr> </table> <table border="0" cellpadding="4" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%" id="table20"> <tr> <td width="100" align="left" valign="top"> <map name="FPMap430"> <area target="_blank" coords="0, 0, 84, 124" shape="rect" href="http://www.riskbook.com/link/gup_benton_(2004).htm"> </map> <img border="0" src="../images/book_gup_benton_(2004)_125.jpg" usemap="#FPMap430" width="85" height="125"></td> <td align="left" valign="top"> <table border="0" cellpadding="1" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%" id="table21"> <tr> <td width="90%" colspan="3"> <p class="title"> <a target="_blank" href="http://www.riskbook.com/link/gup_benton_(2004).htm">The New Basel Capital Accord</a></td> </tr> <tr> <td colspan="3"> <p class="author"><b>Benton Gup</b></td> </tr> <tr> <td width="10%"> <map name="FPMap426"> <area target="_blank" href="http://www.riskbook.com/main/ratings.htm" shape="rect" coords="0, 0, 89, 15"> </map> <img border="0" src="../images/star_5.gif" usemap="#FPMap426" width="90" height="16"></td> <td width="10%" class="author">quality</td> <td width="70%"> <p class="author"> </td> </tr> <tr> <td width="10%"> <map name="FPMap428"> <area target="_blank" href="http://www.riskbook.com/main/ratings.htm" shape="rect" coords="0, 0, 89, 15"> </map><img border="0" src="../images/tech_2.gif" usemap="#FPMap428" width="90" height="16"></td> <td width="10%" class="author">technical</td> <td width="70%">  </td> </tr> <tr> <td width="10%"> <p class="author">2004</td> <td width="10%"> </td> <td width="70%"> <p align="center"><map name="FPMap476"> <area target="_blank" coords="0, 0, 145, 19" shape="rect" href="http://www.riskbook.com/link/gup_benton_(2004).htm"> </map> <img border="0" src="../images/pointer_review.gif" usemap="#FPMap476" width="146" height="20"></td> </tr> </table> </td> </tr> </table> </td> </tr> </table> </td> </tr> <tr> <td height="30" valign="bottom" colspan="2"> <p class="header2_black">Related Papers</td> </tr> <tr> <td colspan="2" bgcolor="#CC9966" height="2"> <img border="0" src="../images/blank_2x2.gif" width="2" height="2"></td> </tr> <tr> <td bgcolor="#FFFFCC" colspan="2"> <table border="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%" cellpadding="6" id="table22"> <tr> <td width="100%"> <p class="explanatory_text"> <img border="0" src="../images/bullet_paper_glossary.gif" width="21" height="15">Holton, Glyn A. (2004). <a target="_blank" href="http://www.riskexpertise.com/papers/Capital.PDF">Capital calculations: Has the CCRO missed the point?</a>, <i>Energy Risk</i>, 1 (3), 41–42.</td> </tr> </table> </td> </tr> <tr> <td height="30" valign="bottom" colspan="2"> <p class="header2_black">Related Forum Discussions</td> </tr> <tr> <td colspan="2" bgcolor="#CC9966" height="2"> <img border="0" src="../images/blank_2x2.gif" width="2" height="2"></td> </tr> <tr> <td bgcolor="#FFFFCC" colspan="2"> <table border="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%" cellpadding="6" id="table23"> <tr> <td width="100%"> <p class="explanatory_text"> <img border="0" src="../images/bullet_bullhorn_narrow.gif" align="left" width="27" height="22"><a target="_top" href="http://www.contingencyanalysis.com/archive/link_thread/04-1/000004ec.htm">Regulatory capital Vs economic capital</a> <i>30 Dec 2003</i> <br> Differences between regulatory and economic capital.</td> </tr> </table> </td> </tr> <tr> <td bgcolor="#FFFFCC" colspan="2"> <table border="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%" cellpadding="6" id="table24"> <tr> <td width="100%" bgcolor="#FFFFFF">  <p align="center"><map name="FPMap0_I1"> <area target="_top" href="http://www.riskglossary.com" shape="rect" coords="0, 0, 164, 102"> </map><img border="0" src="../images/logo.jpg" usemap="#FPMap0_I1" width="165" height="103"></p> <p align="center"><span class="verdana10"> <a href="http://www.riskglossary.com/main/disclaimer.htm">Disclaimer</a></span></p> <p align="center">website: <span class="verdana10"> <a target="_top" href="http://www.contingencyanalysis.com">http://www.contingencyanalysis.com</a></span><br> glossary direct link: <span class="verdana10"> <a target="_top" href="http://www.riskglossary.com">http://www.riskglossary.com</a></span><br> copyright © Contingency Analysis, 1996 - current</p> <p align="center"><map name="FPMap1_I1"> <area target="_top" href="http://www.contingencyanalysis.com" shape="rect" coords="0, 0, 240, 88"> </map><img border="0" src="../images/logo_glossary_white.gif" usemap="#FPMap1_I1" width="241" height="89"></p> </td> </tr> </table> </td> </tr> </table> </td> <td>  </td> </tr> </table> </div> </body>