What Bank Capital Is and Isn’t Capital regulation—requiring a bank to operate with what is deemed to be an adequate level of equity based on its asset size and its risks—is a useful tool to strengthen the incentives for banks to lend safely and prudently. First, I’ll begin with what capital is—essentially shareholder equity in the bank.
People sometimes use the shorthand of banks “holding capital” when speaking of capital  See Gorton and Metrick (2012) for a discussion of the role of repo markets during the crisis; He and Xiong (2012) for a theoretical treatment of the risks posed by short-term wholesale funding; and Barr (2012) and Duffie (2019) for retrospectives.