We study how a bank allocates capital across its business units when facing multiple constraints over several periods. If a constraint tightens – be it because of stricter regulation or higher risk – capital flows to the more efficient unit, i.e. the unit offering a higher marginal return on required capital. Relative efficiency helps explain how a policy measure targeting a specific business unit – e.g. imposing requirements for market risk, or ring-fencing lending – spills over to another, seemingly unrelated unit. It also helps explain the bank’s response to the tightening of a constraint that is contemporaneously slack but likely to bind later on.

我们研究了银行在多个时期面临多重约束时如何在各个业务部门之间分配资金。如果约束变得更加严格（无论是由于更严格的监管还是由于更高的风险），则资本会流向效率更高的部门，即该部门提供了更高的所需资本边际收益。相对效率有助于说明针对特定业务部门的政策措施（例如，对市场风险的要求或围栏贷款的要求）如何溢出到另一个看似无关的部门。它还有助于解释银行对紧缩的约束的反应，该约束同时松弛，但以后可能会束缚。