The Transformative Power of Financial Models

Capital Matters: Banking, Risk, and History

In this episode, Carmen Hofmann (eabh) speaks with Simon Amrein (Lucerne) about the role of capital in banking—past and present.

They explore how banks have historically been funded, whether excessive leverage has made them fragile, and whether more capital really makes banks safer. The conversation touches on the functions and forms of capital, the trade-offs between safety and efficiency, and how capital helps prevent bank runs. They also reflect on how the post-WWII effort to rebuild economies reshaped global attitudes toward financial risk and regulation.