Free Markets Told Us How Much Capital Banks Need

Almost everyone, except maybe certain bankers and those in their service, think that banks should have more capital.

Almost everyone, except maybe certain bankers and those in their service, thinks that banks should have more capital. A thicker capital buffer, as Stanford professor Anat Admati wrote a few days ago, would make banks more resilient in the face of losses, reduce the risk of a financial panic like we had in 2008-2009, and lower the odds that taxpayers will be called upon to prop up lenders deemed too big to fail.

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