Risk Recognition and the Regulation of Bank Capital Adequacy Ratio

In recent years,the regulation of adequacy ratio has aroused the world's attention.In 2004,China Banking Regulatory Commission issued and implemented the capital adequacy ratio of commercial bank management in order to establish the regulation of adequacy ratio as the core of the regulation.This paper,with the aid of the signal game model,studies the regulatory authority and commercial bank's behavior choice under the regulation of adequacy ratio.The regulation of adequacy ratio is most effective under separating equilibrium condition,secondary under semi-separating equilibrium condition,and least effective under the pooling equilibrium Conditions.Based on this,the author carries on the diagnostic analysis of the regulatory effect of adequacy ratio.