Despite ample research demonstrating many consequences of bank geographic deregulation, the bank capital determinants literature has not directly tested the effects of this deregulation. This paper fills this important research gap. We find strong evidence that geographic deregulation...

U.S. banks hold significantly more equity capital than required by their regulators. We test competing hypotheses regarding the reasons for this ldquo;excessrdquo; capital, using an innovative partial adjustment approach that allows estimated BHC-specific capital targets and adjustment speeds to...