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Bank capital management: International evidence

De Jonghe,O.G.
; 
Öztekin,Ö.
Abstract
We examine the dynamic behavior of bank capital using a global sample of 64 countries during the 1994-2010 period. Banks achieve deleveraging through active capital management (equity growth) rather than asset liquidation. In contrast, they achieve leveraging through passive capital management (reduced earnings retention) and substantial asset expansion (but also cash hoarding). The speed of capital structure adjustment is heterogeneous across countries. Banks make faster capital structure adjustments in countries with more stringent capital requirements, better supervisory monitoring, more developed capital markets, and high inflation. In times of crises, banks adjust their capital structure significantly more quickly.
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2015-04
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Tilburg University Research Output Collection
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Bank, capital, regulation, international, speed of adjustment, Basel III, G20 - General, G1 - General Financial Markets, G28 - Government Policy and Regulation, G32 - Financing Policy ; Financial Risk and Risk Management ; Capital and Ownership Structure ; Value of Firms ; Goodwill, SDG 10 - Reduced Inequalities
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De Jonghe, O G & Öztekin, Ö 2015, 'Bank capital management : International evidence', Journal of Financial Intermediation, vol. 24, no. 2, pp. 154-177. https://doi.org/10.1016/j.jfi.2014.11.005
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https://hdl.handle.net/20.500.14602/61919
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