How Does Bank Capital Influence Lending and Securities Holdings? Evidence From Asian Banks
7 Pages Posted: 30 Jun 2020
Date Written: June 6, 2020
This study provides empirical evidence on the impact of bank capital on lending and securities holdings in Asian banks. Using a panel data set of 370 banks from 15 Asian countries over the period 2010-2018, our findings suggest that the increase in bank capital reduces lending supply, especially lending with a maturity between 1 and 5 years. Conversely, we highlight that the incentives to hold more securities (such as investment and trading securities) increase as banks' capital increases.
Keywords: Bank Capital, Bank Lending, Securities Holdings, Asian Banks
JEL Classification: G21, G28, E44
Suggested Citation: Suggested Citation