deposits towards non-deposit liabilities. We find that unobserved time-invariant bank fixed effects are ultimately the most … important determinant of banks’ capital structures and that banks’ leverage converges to bank specific, time invariant targets. …

analysis is relevant to the debate on bank capital regulation, and complements Admati et al. (2010). In that paper we argued …, the effects of leverage reduction on bank managers or shareholders do not represent a social cost. In fact, we show that … to leverage reduction leads to social inefficiencies. The main beneficiaries from high leverage may be bank managers. The …

In this paper we review the actual operational data of an anonymous Central European Bank, using two approaches …

bank. The results suggest that capital requirements may only be of second-order importance for banks? capital structures …

banking. Using cross-sectional data on publicly traded, highest-level U.S. bank holding companies, we find empirical evidence …

We address two questions: (i) Are bank capital structure and value correlated in the cross section, and if so, how? (ii …) If bank capital does affect bank value, how are the components of bank value affected by capital? We first develop a … dynamic model with a dissipative cost of bank capital that is traded off against the benefits of capital: strengthened …