The FSA has published its latest Occasional Paper which looks at the behaviour and determinants of risk-based capital ratios. Using bank-level panel data from the UK, the paper investigates the factors that influence banking institutions’ choice of risk-based capital ratios. Particular focus is placed on evaluating whether and how institutions respond to changes in regulatory capital requirements and if these responses vary across the economic cycle. The paper also looks at the extent to which UK banks’ capital management practices were procyclical under Basel I.

View Occasional Paper (No.31) : On the behaviour and determinants of risk-based capital ratios: revisiting the evidence from UK banking institutions, (PDF 440KB), 19 March 2009