On Regulation, Supervision, (De)Leveraging and Banking Competition: Harder, Better, Faster, Stronger?
39 Pages Posted: 5 Apr 2011
Date Written: June 1, 2010
Abstract
This paper examines international differences in banks’ capital structure adjustments across a large panel of 94 countries over the period 1993 to 2007. A bank's ability to adjust its capital ratio is influenced by corporate governance, public policy, market structure, and bank regulatory characteristics of the countries. In institutional environments with higher adjustment costs, due to the weaker governance and stricter regulation, the adjustment is significantly slower. Banks are able to make faster capital structure adjustments in countries that practice stronger private and supervisory monitoring and have more competitive banking systems. Identifying the drivers of banks’ adjustment speed towards target capital ratios contributes to our understanding of which settings influence (i) the pro-cyclicality of capital regulation and (ii) the strength of macro-financial feedback loops.
Keywords: Banks, Capital Management, Capital Regulation, International, Partial Adjustment, Institutions
JEL Classification: G20, G21, G28, G32
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
Bank Risk Taking and Competition Revisited
By John H. Boyd and Gianni De Nicolo
-
Liberalization, Moral Hazard in Banking and Prudential Regulation: Are Capital Requirements Enough?
-
Competition and Financial Stability
By Franklin Allen and Douglas M. Gale
-
Capital Requirements, Market Power and Risk-Taking in Banking
-
Size, Charter Value and Risk in Banking: An International Perspective
-
Competition and Stability: What's Special About Banking?
By Elena Carletti and Philipp Hartmann
-
Bank Risk-Taking and Competition Revisited: New Theory and New Evidence
By John H. Boyd, Gianni De Nicolo, ...
-
By Thorsten Beck, Asli Demirgüç-kunt, ...
-
By Thorsten Beck, Asli Demirgüç-kunt, ...