Equity capital represents a bank’s net worth—the difference between its assets and liabilities. Put another way, it’s the value of assets financed by the bank’s owners, rather than depositors or other sources of funds. Capital serves as a buffer to absorb losses and prevent failures and...

This study investigates the anomalous relationship between real stock returns and inflation. Specifically, we investigate hypotheses that claim the proxy relationship between inflation and expected real output is driven by the practice of debt monetization and/or countercyclical monetary policy...

Diversification opportunities for banks may be greater today because of the lessening of geographic restrictions. In addition, regional economies have undergone vast transformations, with relatively volatile industries often assuming a diminished role. To assess whether these changes have...

The U.S. banking industry continues to consolidate, with large, complex banking organizations becoming more important. Traditionally, these institutions have not emphasized small business lending. On the other hand, technological advances, particularly credit scoring models, make it easier for...