The Effectiveness of Bank Capital Adequacy Requirements : A Theoretical and Empirical Approach

The aim of this paper is to analyse how banking firms set their capital ratios, that is, the rate of equity capital over assets. In order to study this issue, two theoretical models are developed. Both models deal with the existence of an optimal capital ratio; the first one for firms not affected by capital adequacy regulation, the second one for firms which are. The models have been tested by estimating a disequilibrium model using data of Spanish savings banks.

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Year of publication:	2000-12-01
Authors:	Barrios, Victor E. ; Blanco, Juan M.
Institutions:	Institut de Recherche Économique et Sociale (IRES), École des Sciences Économiques de Louvain
Subject:	capital ratio \| capital adequacy regulation \| disequilibrium model

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Extent:	application/pdf
Series:	Discussion Papers (IRES - Institut de Recherches Economiques et Sociales).
Type of publication:	Book / Working Paper
Language:	English
Notes:	The text is part of a series UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES) Number 2001001 2 pages long
Classification:	G21 - Banks; Other Depository Institutions; Mortgages ; G28 - Government Policy and Regulation ; C34 - Truncated and Censored Models
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10004985251