1st Edition

Banking and Effective Capital Regulation in Practice A Leadership Perspective

By Sophia Velez Copyright 2021
    162 Pages 7 B/W Illustrations
    by Routledge

    162 Pages 7 B/W Illustrations
    by Routledge

    Due to a historical lack of attention to the importance of modelling, measuring and managing risk, senior bank leaders are struggling to implement unified practices within their financial institutions that could address the gaps posed by risky management behaviour, rogue trading, liquidity crises, prohibited investments in mortgage-backed securities, and default risks aligned with loans. This book discusses the theories at play between bank agents (bank managers) and their principals (shareholders), a topic which has gained importance as a result of the banking crisis, and similarly, governed the need for more efficient risk management and ethical managerial practices.

    The author worked with a senior bank leadership team to identify and describe effective capital regulation practices that can lead to a reduction in loss and risky management behavioural practices. The book offers consensus on a number of activities that bank managers can implement to address bank risk. It analyses the relevant factors that determine the necessity for banking regulation and the important role of regulation in managing banking crises. The author’s analysis of the important regulatory aspects in developed countries such as the US, offers a useful conceptual framework for creating an adequate banking regulatory environment in developing countries.

    This book offers an original contribution to the field of banking that undergraduate, masters, PhD students, academics and researchers can use to gain a deeper understanding of the constructs at play in the banking industry.

    List of Tables

    List of Figures



    About the Author

    Outline of Chapters

    Part 1: Mega Banks Significant Losses

    Chapter 1: Losses of Mega Banks and Economic Impact

    Chapter 2: Bank Managers Practices and Significant Losses

    Chapter 3: Risky Management Practices and Principal Theory

    Chapter 4: Risky Management Practices and Goal Theory

    Chapter 5: OCEG Standards

    Part 2: Government Regulations and Compliance Environment

    Chapter 6: Dodd-Frank Bill 2010 and Regulatory Environment

    Chapter 7: Risk Management Efforts and Excessive Risk Taking

    Chapter 8: Governance and Monetary Policy

    Chapter 9: CCAR and DFAST Testing

    Chapter 10: Bank Manager’s Failed CCAR and DFAST Efforts

    Part 3: Bank Leadership Consensus on Capital Regulation Practices

    Chapter 11: Understanding Capital Regulation Challenges

    Chapter 12: Risk Appetite, Capital Structure, Stress Test and Governance

    Chapter 13: Risky Identification and Communication

    Chapter 14: Timely Reporting

    Chapter 15: Assurance Functions

    Chapter 16: Compliance Analytics

    Chapter 17: Comprehensive Risk Management Framework


    Appendix A: First Round Questionnaire



    Sophia Velez has over 16 years of experience as a Certified Public Accountant (CPA), providing consulting services to large banks.