A simple way to reduce the frequency of crises is to require banks to rely more on equity and less on debt so that they can incur more losses without going bankrupt – a measure that is currently being considered at the global level. Thanks to reports just released by the Financial Stability Board and the Basel Committee – one on the long-term implications of requiring higher capital-to-asset ratios, and one on the transitory effects of introducing them – we know more now about the likely impact of such regulation.