This paper extends the economic growth model tested by Levine and Zervos (1998) by including a measure for capital allocation efficiency proxied by stock price informativeness. Using a sample of 59 countries, this study finds that stock price informativeness as measured by firm-specific return...

Germany's bank-based financial system provides a high level of financial inclusion, measured by bank outreach and use of financial services. However, the most vulnerable individuals and small enterprises in Germany tend to be excluded or credit constrained. The quality of financial inclusion is...

This paper focuses on risk tolerance which clearly influences financial decision making. We explore the emotional side of a risk taking behaviour, comparing alternative measures of financial risk tolerance resulting from the consilience of various disciplines. We wonder whether we financially...

The eurozone sovereign debt crisis, characterized by enormous debt burdens faced by its weakest economies, has also induced a parallel credit crunch and illiquidity concerns for European banks. Bank holdings of sovereign debt issued by peripheral eurozone countries have dropped in value and are...

Financial exclusion concerns 2.5 billion individuals and more than 450 million enterprises. The G20 countries are committed to the reduction of this phenomenon. The Bank of Italy has a fundamental role in the field of financial inclusion, both on a national and an international scale through...

Should banks be diversified or focused? Does diversification indeed lead to enhanced performance and, therefore, greater safety for banks, as traditional portfolio and banking theory would suggest? This paper investigates the link between banks? profitability (ROA) and their portfolio...

We analyze the dynamics of banks' regulatory capital ratios. Using monthly data of regulatory capital ratios for a subset of large German banks, we estimate the target level and the adjustment speed of the capital ratio for each bank separately. We find evidence that, first, there exists a...

Ongoing financial innovation and greater information availability increase the tradability of bank assets and reduce banks' dependence on individual bank managers as private information in the lending process declines. In this paper we argue that this has two effects on banks, with opposing...

This paper examines how capital is determined by German banks. We analyse whether the determinants found in the previous empirical literature hold for the special German banking sector with its three characteristic banking groups of savings banks, cooperative banks and other banks. On the basis...

This paper documents that standard cross-sectional determinants of firm leverage also apply to the capital structure of large banks in the United States and Europe. We find a remarkable consistency in sign, significance and economic magnitude. Like non-financial firms, banks appear to have...