A Regulatory Roadmap is Not Banking Territory: Evolving Trends in Capital Requirements and Responses to Regulation

Legislation stemming from the global financial crisis has resulted in a dramatic reshaping of the relationship between the banking sector and its regulatory overseers, with profound implications for investors across the capital structure. From the Dodd-Frank Act to the Basel III agreement, the landscape upon which regulators expect banking institutions to operate has changed markedly. Still, the industry is also actively involved in adapting its business model and engaging political players in an effort to limit regulations that constrain operations and hamper profitability. Therefore it is vital that investors across asset classes understand the implications of these changes for the industry and for their investments.

In the attached paper, the BlackRock Investment Institute explores these key issues, which were debated recently at the Institute's Bank Capital Workshop.  Click here for BlackRock's analysis.