Risky Bank / RiskyBank / Economic Required Capital / Allocating Capital / S&P / Salomon / Regulatory Required Capital / Exhibit 1 RiskyBank SafeBank Regulatory Capital / Max[RegCap(I) − SurplusRegCapEconCap(I) − SurplusEconCap] Here Regulatory Capital / Safe Bank / SafeBank / Incremental Capital Requirement RiskyBank SafeBank / Economic Capital / /
Currency
USD / / /
IndustryTerm
sub-prime lender / fiduciary services / bank opportunities / higher-tier lender / regulatory constrained banks / stand-alone bank / bank activities / bank / bank assets / required banking / bank financing / information technology / bank capital focus / subprime lender / ancillary services / bank trying / acquiring a sub-prime lender / /
Organization
US Federal Reserve / /
Person
Eric Falkenstein / /
Position
author / loss leader / representative / General / General Formula / /
1 Accounting for Economic and Regulatory Capital in RAROC Analysis For a bank trying to assess risk-adjusted returns on capital (RAROC) for different lines of business, understanding the differences between regulatory a