We investigate how banks' capital and lending decisions respond to changes in bankspecific capital and disclosure requirements. We find that an increase in the bankspecific regulatory capital requirement results in a higher bank capital ratio, brought about via less asset risk. A decrease in the...

We investigate how banks' capital and lending decisions respond to changes in bankspecific capital and disclosure requirements. We find that an increase in the bankspecific regulatory capital requirement results in a higher bank capital ratio, brought about via less asset risk. A decrease in the...

This paper investigates how banks' capital and lending decisions respond to changes in bank-specific capital and disclosure requirements using proprietary regulatory data from the Danish FSA on the full population of banks in Denmark. We find that banks adjust their capital ratio via different...