And we also know that banks manage capital to meet regulatory minimums as well as to support strategic objectives, and for that reason successful banks hold capital well above regulatory minimums. Banks know that customers, counterparties, creditors, and investors consider capital as well as the financial performance and risk exposures of banks when making their decisions.
Under today's relatively stable minimum regulatory capital requirements, banks hold excess capital to be able to respond to potential business expansion opportunities and to manage through market and  BIS Review 18/2007  5  credit risk cycles.