Purpose - This study contributes to existing literature by investigating bank capital structure dynamics during the Covid-19 pandemic. The role of contemporary bank-specific determinants of capital structure during this period is analyzed. Design/methodology/approach - An independent t-test is...

Theoretically, bank's loan monitoring activity hinges critically on its capitalisation. To proxy for monitoring intensity, we use changes in borrowers' investment following loan covenant violations, when creditors can intervene in the governance of the firm. Exploiting granular bank-firm...

This study investigates whether fluctuations in credit supply in a macroeconomy and a relational bank's financial condition affect the capital structure adjustment of firms. Using data for Japanese listed firms from 1988 to 2014, we find that firms adjust their capital structure slower during...

Credit spreads on household and business loans move in lockstep and spike in every recession. We propose a theory as to why banks tighten their lending standards following a drop in market sentiment. The key feature is a procyclical shadow banking sector that shifts risk from traditional banks...

New technology promises to expand the supply of financial services to small businesses poorly served by the banking system. Does it succeed? We study the response of FinTech to financial services demand created by the introduction of the Paycheck Protection Program (PPP). We find that FinTech is...

Despite the extensive debate on the effects of bank competition on risk-taking and procyclicality, there is no evidence of its role in the effects of macroprudential policy on loans' growth and on the sensitivity of lending to the business cycle. We contribute to the literature by investigating...

PurposeThe purpose of this paper is to examine the effects of bank mergers on systemic and systematic risks on the relative merits of product and market diversification strategies. It also observes determinants of M&A deals criteria, product and market diversification positioning, crisis...

We assess the quantitative effects of the recent proposal for more robust bank capital adequacy (Admati and Hellwig, 2013; Myerson, 2014). Our theoretical proof and evidence accord with the core thesis that banks become more stable by increasing its equity capital cushion to absorb extreme losses in...

This paper builds a dataset on bank ownership that covers more than 6,500 banks in 181 countries (59 low-income economies, 72 middle-income economies, and 50 high-income economies) over 1995-2020. I show that until 2010, there was a reduction in state-ownership of banks and an increase foreign...

Financial institutions heterogeneity, a high degree of dissimilarity across multiple dimensions, including business focuses, correlated asset holdings, capital structures, and funding sources, reduces systemic risk. We empirically test this hypothesis using a bank holding company (BHC) level...