Begenau, Juliane; Bigio, Saki; Majerovitz, Jeremy; … - 2021
core. The estimated model matches four facts about banks’ Tobin’s Q that summarize bank leverage dynamics. (1) Book and … market equity values diverge, especially during crises; (2) Tobin’s Q predicts future bank profitability; (3) neither book … nor market leverage constraints are binding for most banks; (4) bank leverage and Tobin’s Q are mean reverting but …