Marcheggiano, Gilberto; Miles, David K; Yang, Jing - C.E.P.R. Discussion Papers - 2011
This paper reports estimates of the long-run costs and benefits of banks funding more of their assets with loss … of the benefits from having banks use more equity no estimate of costs--however accurate--can tell us what the optimal … level of bank capital is. We use empirical evidence on UK banks to assess costs; we use data from shocks to incomes from a …