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资料题:What is the main problem raised by the host in the commentary?

发布时间:2021-03-19

A.Whether Mr. Bove and Mr. Elliott'sviews are correct

B.Whether it is good to lift up theamount of capital reserves

C.The deep reason for Mr. Bove andMr. Eliott to hold different opinions

D.How to accelerate the economicrecovery

参考资料

FACE-OFFKEEP IT IN THE BANKTreasury officials want to increase the amount of capital that banks are required to hold in reserve. Sounds like a good idea, but will it squeeze lending and actually slow the economic recovery? Here fllow the perspectives of two experts:RICHARD BOVE, (a famous bank analyst at Rochdale Securities): Yes. Capital reseves are higher than they've been since 1936. That wasn't the problem last year; it was that banks had to write down assets at disressed prices. The govenment is sending contradictory signals here, tlling banks to increase lending and increase capital atthe same time. You can't do both, so of course lending is going to tighten if you mandate higher capital reserves.DOUG ELIOTT,(a fllow at the Broklings lstition): No. My researh shows that if the minimum equity capital requirements were raised by 4 percent, the prices of a loan might go up only 0.2 percent. That's negligble compared with the stabilty benefits of btter-aptalized banks. The cost of capital is usually only a fifth of the total cost of a loan, and banks have several levers to pull besides loan price to deal with the need for more capital.OUR VERDICT: The smart way to do this is to link the amount of capital banks have to hold in reserve to the amount of risk they take. The riskier they are, the more capital they need. Changes likely won't take place until 2011, so banks will have plenty time to prepare.

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