Tougher capital requirements aimed at offsetting future financial crises may protect banks with little harm to the economy, a Federal Reserve Bank of San Francisco economist said.

“These buffers raise the classic regulatory dilemma of safety versus economic growth, but may provide protection against financial calamity at an acceptable cost,” Oscar Jorda, a research adviser at the regional Fed bank, said in a paper released today.

Policy makers are trying to design regulations that account for swings in the economy and financial markets and avoid a repeat of the financial panic that began with the collapse of subprime mortgage market in 2007. The Basel Committee on Bank Supervision, made up of representatives from more than two dozen countries, last year proposed requiring banks to increase their quantity and quality of capital.

Under an agreement known as Basel III, the idea of variable or countercyclical buffers was introduced, which would require institutions to boost capital amid lending booms to strengthen balance sheets and slow any credit bubbles. International, systemically important firms would be asked to hold extra equity.

Jorda cited studies of the economic impact, including one from the New York Fed estimating lost output of 0.08 percent to 0.09 percent for each percentage point increase in capital requirements. “These estimates should be woven into the regulatory decision-making process,” Jorda said in the bank’s Economic Letter.