This capital is typically provided through equity flotation on securities markets and through venture capital firms and DFIs.

Higher equity capital requirements, for example, require banks to fund themselves with relatively more equity and relatively less debt.

Banks often oppose higher equity asset ratios, because equity capital is more expensive than debt capital. But this is precisely because of the lemon effect.

And equity capital requirements for large, systemically important financial institutions remain too low.

The equity capital of banks urgently needs to be substantially increased.

Spanish banks have 7 equity capital on average on their balance sheets.

Typically there is an even greater shortage of venture and equity capital for new enterprises.

Nevertheless, private equity continues to be a large and active asset class and the private equity firms, with hundreds of billions of dollars of committed capital from investors are looking to deploy capital in new and different transactions.

55. For firms over a certain size, sources of external equity and venture capital are critical.

(d) Strengthen local capital markets, including new or expanded stock exchanges and specialized financial institutions, providing equity and loan capital to small and medium size enterprises

Meanwhile, the ECB has announced that it will have to double its equity capital.

This dataset takes account of only the approved equity capital for projects in production and under implementation, not actual, and does not cover reinvested earnings and other capital.

Equity capital will increase relative to assets but, under current policies, it will increase because banks reduce their assets, not because they raise capital.

Other headlines that have recently reached South Africa were Bain Capital and KKR, the big boys of private equity.

This is why equity capital held by financial institutions typically is more than twice as expensive as debt capital and why these institutions try to minimize its use.

This form of financing is often used by private equity investors to reduce the amount of equity capital required to finance a leveraged buyout or major expansion.

Under Chapter 11, companies with a solid underlying business generally swap debt for equity. Old equity holders are wiped out and old debt claims are transformed into equity claims in the new entity which continues operating with a new capital structure.

Rather, the banking system is at the brink of insolvency, with a permanent loss in equity capital.

This would be the case as long as the banks losses remained smaller than their equity capital.

Higher and pro cyclical equity capital requirements on banks, combined with a requirement to raise contingent long term debt debt that converts into equity in a crisis is a better way forward.

He also has invested in non traditional asset classes, including real estate, oil, timber, private equity, and venture capital and buyout firms.

The advantage of equity capital is that it is loss absorbing, meaning that only after losses wipe out all of the equity do they need to be apportioned between creditors.

Second, with banks losing substantial amounts of equity capital estimates now reach 300 billion and more the need to maintain minimum equity debt ratios will force them to curtail business lending, hindering investment demand.

Investment banks like Bear Stearns and Lehman Brothers got into trouble because they had too little equity capital far less than 10 .

Lack of equity capital, in turn, made risk averse shareholders hire gamblers to manage their limited liability investment companies.

These risks are already exacerbating the economic slowdown equity markets are falling everywhere, leading to negative wealth effects on consumption and capital spending.

Where realistic debt restructuring scenarios indicate capital shortfalls, across the board conversion of bank debt into equity will be necessary.

Rather, bonds should be at least partly converted into equity capital, and any infusion of new capital by the government should be in exchange for securities that are senior to those of existing bondholders.

Instead, they should become partners of private shareholders, endowing the banks temporarily with new equity capital until the crisis is over.

Loan or bond covenants often require borrowers to agree to maintain a minimum level of equity capital or cash on hand.

History and development Early history and the development of venture capital The seeds of the US private equity industry were planted in 1946 with the founding of two venture capital firms American Research and Development Corporation (ARDC) and J.H.

The mutual interaction between the incentive to minimize equity capital and the incentive to gamble in order to exploit the upside risks caused America s crisis.

And the greatest devils of our economic age lurk in the details of how officials regard the capital the equity funding of our largest banks.

They are wary of rocking the financial boat, so they go easy on financial reform and refuse to insist on more equity capital for banks.

To do so, they develop complicated legal claim structures that hardly anyone can fully understand and operate with too little equity capital to cover the risks.

Higher equity capital requirements for banks are good for the broader economy they make financial crises (and the zombie syndrome) less likely, less severe, or both.

They will continue to deprive the banking system of its equity capital, with little chance of it being recouped in the near future.

It would also oversee mergers and acquisitions in the education sector, establish its own private equity and venture capital education investment funds, and operate as a fund of funds.

Higher capital requirements mean, in essence, more equity funding and by implication, under any sensible definition relatively less debt for a given balance sheet size. This is an attractive and sensible policy, because today s global banks have relatively small slivers of equity underpinning their operations.

Employment equity and workplace diversity

(d) Intergenerational and intragenerational equity

(e) Intergenerational equity and responsibility

And that's called your equity.

Lastly, debt growth was somewhat restrained by the dynamism of non debt related capital movements, especially foreign direct and indirect investment (in equity capital), as well as the flow of resources to short term deposits in the region apos s banking systems, reflecting in part a repatriation of capital.

But in bad times, when it is important to keep banks lending, bank capital would automatically be increased by the debt to equity conversion.