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higher loan interest rates, then borrowers are likely to become more risky, which may destabilize the lending bank. This …
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Purpose - This paper investigates the role of market structure and institutional quality in determining bank capital … and 2016. Findings - Results show that market structure (proxied with bank competition) as well as institutional quality … (regulatory quality) lowers bank capital in the sampled banks. This suggests that banks operating in less competitive markets with …
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How does bank capital affect the relationship between bank concentration and risk taking? I develop a tractable dynamic … model, when the bank capital ratio exceeds the minimum requirement, intensifying bank competition leads to more risk taking … loan rate and the accumulation of excess bank capital. The two forces also jointly determine a non-monotonic relationship …
Persistent link: https://www.econbiz.de/10014238948
This study analyzes the relevance of capital adjustment and risk-taking adjustment during the financial tsunami when the banking industry was under capital regulation. Using the panel data of commercial banks in the USA and non-USA from 2003 to 2009, we consider the effects of financial freedom,...
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Concentration risk is an important feature of many banking sectors, especially in emerging and small economies. Under the Basel Framework, Pillar 1 capital requirements for credit risk do not cover concentration risk, and those calculated under the Internal Ratings Based (IRB) approach...
Persistent link: https://www.econbiz.de/10012977807
Concentration risk is an important feature of many banking sectors, especially in emerging and small economies. Under the Basel Framework, Pillar 1 capital requirements for credit risk do not cover concentration risk, and those calculated under the Internal Ratings Based (IRB) approach...
Persistent link: https://www.econbiz.de/10011715110