Convergence and clustering of Tier 1 capital in the European banking sector: a non-linear factor approach

This short communication examines the convergence of the Tier 1 capital ratio in the banking sector across the EMU. The study applies the Phillips-Sul convergence and clustering algorithm for 251 European banks over annual periods from 1990 to 2010. The null hypothesis of full convergence is rejected; however, the convergence tests reveal heterogeneity in the Tier 1 capital ratio in the European banking sector, with five distinct clusters.

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Year of publication:	2012
Authors:	Apergis, Nicholas ; Gabrielsen, Alexandros ; Payne, James E. ; Zagaglia, Paolo
Published in:	International Journal of Monetary Economics and Finance. - Inderscience Enterprises Ltd, ISSN 1752-0479. - Vol. 5.2012, 2, p. 210-221
Publisher:	Inderscience Enterprises Ltd
Subject:	Tier 1 capital ratio \| Phillips-Sul club convergence method \| Europe \| banking sector \| EMU \| Economic and Monetary Union \| European Union \| clustering algorithms \| European banks \| equity capital \| risk-weighted assets

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Extent:	text/html
Type of publication:	Article
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10010669733