The aim of this study is to examine the effects of bank-specific, regulatory and macroeconomic determinants on bank …

We develop a model of the joint capital structure decisions of banks and their borrowers. Strikingly high bank leverage … emerges naturally from the interplay between two sets of forces. First, seniority and diversification reduce bank asset … and fragility. Deposit insurance and the expectation of government bailouts increase not only bank risk taking, but also …

criticized new regulation on the ground that it would enhance the cost of funds for bank borrowers and deteriorate the bank … profitability. In this study, we examine the impact of capital requirements on the cost of financial intermediation and bank … generalized method of moments (GMM) estimator, we find robust evidence that higher bank regulatory capital ratios reduce the cost …