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Risk-based equity requirements: how equity rules for the financial sector can be applied to the real economy

Handschin, Lukas. (2012) Risk-based equity requirements: how equity rules for the financial sector can be applied to the real economy. Journal of Corporate Law Studies, Vol. 12, no. 2. pp. 255-293.

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Official URL: http://edoc.unibas.ch/dok/A6056171

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Abstract

It is undisputed that rules are necessary to cope with the risks of failing financial institutions in the financial sector. These rules link the risk profile of a financial institution to the quanti-tative and qualitative properties of its capital. In the real economy the discussion proceeds from the opposite direction, putting the necessity of a minimal capital and its regulation into question. This essay shows however, that even for the real economy, rules are in place which require the board of a company to adjust the risk profile to the level and structure of the com-pany’s equity and vice versa. The relationship between risk-bearing ability and equity leads to a set of principles and rules on how to determine the correct amount of equity. The essay de-scribes these rules and their procedural enforcement based on company and accounting law rules.
Faculties and Departments:02 Faculty of Law > Departement Rechtswissenschaften > Fachbereich Privatrecht > Ordinariat Privatrecht, insb. Gesellschafts- und Rechnungslegungsrecht (Handschin)
UniBasel Contributors:Handschin, Lukas C.
Item Type:Article, refereed
Article Subtype:Research Article
Bibsysno:Link to catalogue
Publisher:Hart
Note:Publication type according to Uni Basel Research Database: Journal article
Language:English
Identification Number:
Last Modified:31 Dec 2015 10:51
Deposited On:04 Jan 2013 08:37

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