Abstract

This paper analyses the impact on banks' regulatory capital of the Basel Committee's proposals for revising the capital adequacy framework. It provides a preliminary estimate of how much capital banks, in Italy and the rest of Europe, might need to accumulate as a result of losses related to the crisis and to satisfy the new and more stringent regulatory constraints on capital and leverage ratios envisaged in the proposal; it analyses the different strategies banks can adopt to adjust to the new regulatory framework and, finally, it discusses the impact that this might have on the cost of capital.