Dick-Nielsen, Jens; Gao, Zhuolu; Lando, David - 2023
a decrease in bank equity risk. We show theoretically, that keeping less capital in excess of the minimum capital … capitalization is a significant determinant of equity risk, and can explain why bank equity risk has not become lower after the Great … Financial Crisis. Smaller excess capitalization also leads to decreases in market-to-book ratios. Lower leverage has, however …