This paper presents new evidence on the empirical relationship between bank solvency and funding costs. Building on a … 100 bps increase in regulatory capital ratios is associated with a decrease of bank funding costs of about 105 bps. A 100 … test could have led to a significant underestimation of the impact of stress on bank capital ratios …

these operations. Despite a vast literature on the topic, central bank approaches and practices vary considerably. In this …

This paper examines the role of bank capital in decision-making by bank holding companies (BHCs) in the United States …. Following Chami and Cosimano's (2001) call option approach to bank capital, BHCs optimally choose the amount of capital to … insure the bank against becoming capital constrained in the future. We provide empirical support for this model, and find …

This paper analyzes the evolution of bank funding structures in the run up to the global financial crisis and studies … the implications for financial stability, exploiting a bank-level dataset that covers about 11,000 banks in the U.S. and …-crisis period were more likely to fail afterward. The likelihood of bank failure also increases with bank risk-taking. In the cross …

the real economy. The study also runs an empirical exercise to estimate the costs of bank narrowness and draws policy …

One of the challenges of financial stability analysis and bank stress testing is how to establish scenarios with … capital positions. The outcome suggests that spillover effects have a highly non-linear impact on bank soundness, both in …