Bank capital management: International evidence
Date of this Version
1-1-2015
Document Type
Article
Rights
default
Abstract
We examine the dynamic behavior of bank capital using a global sample of 64 countries during the 1994-2010 period. Banks achieve deleveraging primarily through equity growth (rather than asset liquidation). In contrast, they achieve leveraging through reduced earnings retention and substantial asset expansion. The speed of capital structure adjustment is heterogeneous across countries. Banks make faster capital structure adjustments in countries with more stringent capital requirements, better supervisory monitoring, more developed capital markets, and high inflation. In times of crises, banks adjust their capital structure significantly more quickly.
Recommended Citation
De Jonghe, Olivier and Öztekin, Özde, "Bank capital management: International evidence" (2015). College of Business Faculty Publications. 18.
https://digitalcommons.fiu.edu/business_fac/18
