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Nearly two years after the Lehman Brothers bankruptcy, banks are working hard to improve their evaluation of the risks and returns that lay at the heart of their businesses, as they strive to put increasingly scarce (and increasingly expensive) capital to its best use. For now, capital decisions seem to be relatively easy: more capital, and more high-quality capital, are the order of the day. But as economic and monetary conditions begin to return to something resembling normalcy, and as regulators settle on enhanced capital and liquidity requirements, our research suggests that capital decision making is about to get a lot harder.