... change the numerator of the capital ratio, by raising or lowering capital levels, or they may change the denominator, by contracting or expanding lending, selling or investing in other assets, and/ or ... high enough to maintain dividends and retain earnings, and 32 The emphasis on the quality of bank capital during the wave of recent recapitalizations across the globe and the international ... we include real quarterly GDP growth (GDP) and the inflation rate (INF; using the UK Consumer Price Index).27 As a measure of the tightness of monetary policy, we include changes in the official...