Published 2007, 91pp

This paper builds on the 2003 Capital Adequacy paper through a number of expansions & enhancements including:

• Introducing a new and insightful “Equity at Risk” perspective that is supplemental to the NPV distribution perspective for assessing capital adequacy. This methodology reveals potential interim states of capital inadequacy that would go unseen under the NPV distribution approach.
• Expanding capital adequacy insights into the realm of capital allocation
• Expanding capital adequacy measures into risk adjusted performance measures
• Delving into new best practices addressing the details of the operative risk category. Operative risk was given only cursory coverage in the first paper.