Global Versus Non-Global Banks: A Capital Ratios-Based Analysis

Journal of Central Banking Theory and Practice (2020-2021, Forthcoming)

20 Pages Posted: 1 Oct 2020

See all articles by Konstantinos Drakos

Konstantinos Drakos

Athens University of Economics and Business - Department of Accounting and Finance

Ioannis Malandrakis

Athens University of Economics and Business - Department of Accounting and Finance

Multiple version iconThere are 2 versions of this paper

Date Written: July 5, 2020

Abstract

This paper examines the Leverage Ratio and Total Capital Ratio of global versus non-global banks, in both the pre- and the post crisis period. A panel data set of 165 global and non-global financial institutions from 38 countries is used for the period 1999-2015 and a random effects model is employed to examine whether global banks perform better or not compared to their non-global counterparts. This study comes up with two important findings. First, global banks do not exhibit heterogeneous behavior with respect to both ratios neither in the pre- and especially nor in the post-crisis period. Second, the Leverage Ratio is crisis-insensitive, but the Total Capital Ratio is not. Our findings encourage further research on the topic of the contribution of global banks to the financial crisis propagation (at least as far as leverage is concerned).

Keywords: CAMELS factors, financial crisis, Global banks, Leverage Ratio, Non-global banks, Total Capital Ratio

JEL Classification: C33, G01, G21, G24, G29

Suggested Citation

Drakos, Konstantinos and Malandrakis, Ioannis, Global Versus Non-Global Banks: A Capital Ratios-Based Analysis (July 5, 2020). Journal of Central Banking Theory and Practice (2020-2021, Forthcoming), Available at SSRN: https://ssrn.com/abstract=3674850 or http://dx.doi.org/10.2139/ssrn.3674850

Konstantinos Drakos

Athens University of Economics and Business - Department of Accounting and Finance ( email )

76 Patission Street
GR-104 34 Athens
Greece

Ioannis Malandrakis (Contact Author)

Athens University of Economics and Business - Department of Accounting and Finance ( email )

76 Patission Street
Athens
Greece

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
17
Abstract Views
192
PlumX Metrics