Bank Capital And Lending An Extended Framework And Evidence Of Nonlinearity
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Bank Capital And Lending An Extended Framework And Evidence Of Nonlinearity
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Author : Mr.Mario Catalan
language : en
Publisher: International Monetary Fund
Release Date : 2017-11-16
Bank Capital And Lending An Extended Framework And Evidence Of Nonlinearity written by Mr.Mario Catalan and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2017-11-16 with Business & Economics categories.
This paper studies the transmission of bank capital shocks to loan supply in Indonesia. A series of theoretically founded dynamic panel data models are estimated and find nonlinear effects of capital on loan growth: the response of weaker banks to changes in their capital positions is larger than that of stronger banks. This non-linearity implies that not only the level of capital but also its distribution across banks in the financial system affects the transmission of shocks to aggregate lending. Likewise, the effects of bank recapitalization on loan growth depend on banks’ starting capital positions and the size of capital injections.
Covid 19 And European Banking Performance
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Author : Paul Wachtel
language : en
Publisher: Taylor & Francis
Release Date : 2023-07-26
Covid 19 And European Banking Performance written by Paul Wachtel and has been published by Taylor & Francis this book supported file pdf, txt, epub, kindle and other format this book has been release on 2023-07-26 with Business & Economics categories.
The monograph presents a comprehensive analysis of the impact of the COVID-19 pandemic on European banking, both at a macro and a micro level. It analyses the impact of the pandemic on bank stability, performance and credit policies, as well as their strategic adjustments to the challenges brought about by the COVID-19 pandemic. The initial chapters analyze the various governmental responses to the pandemic. Topics of discussion include the scale and scope of the wide range of public policies undertaken to mitigate the consequences of the crisis, and their efficiency in limiting the negative impact of the pandemic on the economy. The results suggest that the extensive public interventions have been largely successful in averting the possible disastrous consequences for the financial sector on a macro level. On a micro level, the COVID-19 pandemic has disrupted the restructuring and recovery of the banking industry started after the 2008 crisis which has had a significant impact on economies around the world, arguably leading to a negative long-lasting effect on sustainable development. To examine this, the book focuses on the impact of the pandemic on bank lending policies, bank stability and performance, and on competitive position of the banks vis a vis the FinTech sector. Offering a thorough overview of the issues that banks will have to face as a consequence of pandemic related macroeconomic and industry adjustments, the book will be of interest to scholars, researchers and students of banking and finance as well as banking specialists concerned with the impact of crises on financial markets, risks and resilience.
Basel Iii And Bank Lending Evidence From The United States And Europe
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Author : Mr.Sami Ben Naceur
language : en
Publisher: International Monetary Fund
Release Date : 2017-11-15
Basel Iii And Bank Lending Evidence From The United States And Europe written by Mr.Sami Ben Naceur and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2017-11-15 with Business & Economics categories.
Using data on commercial banks in the United States and Europe, this paper analyses the impact of the new Basel III capital and liquidity regulation on bank-lending following the 2008 financial crisis. We find that U.S. banks reinforce their risk absorption capacities when expanding their credit activities. Capital ratios have significant, negative impacts on bank-retail-and-other-lending-growth for large European banks in the context of deleveraging and the “credit crunch” in Europe over the post-2008 financial crisis period. Additionally, liquidity indicators have positive but perverse effects on bank-lending-growth, which supports the need to consider heterogeneous banks’ characteristics and behaviors when implementing new regulatory policies.
Bank Leverage And Monetary Policy S Risk Taking Channel
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Author : Mr.Giovanni Dell'Ariccia
language : en
Publisher: International Monetary Fund
Release Date : 2013-06-06
Bank Leverage And Monetary Policy S Risk Taking Channel written by Mr.Giovanni Dell'Ariccia and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2013-06-06 with Business & Economics categories.
We present evidence of a risk-taking channel of monetary policy for the U.S. banking system. We use confidential data on the internal ratings of U.S. banks on loans to businesses over the period 1997 to 2011 from the Federal Reserve’s survey of terms of business lending. We find that ex-ante risk taking by banks (as measured by the risk rating of the bank’s loan portfolio) is negatively associated with increases in short-term policy interest rates. This relationship is less pronounced for banks with relatively low capital or during periods when banks’ capital erodes, such as episodes of financial and economic distress. These results contribute to the ongoing debate on the role of monetary policy in financial stability and suggest that monetary policy has a bearing on the riskiness of banks and financial stability more generally.
Bank Capital And Uncertainty
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Author : Mr.Fabian Valencia
language : en
Publisher: International Monetary Fund
Release Date : 2010-09-01
Bank Capital And Uncertainty written by Mr.Fabian Valencia and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2010-09-01 with Business & Economics categories.
An important role for bank capital is that of a buffer against unexpected losses. As uncertainty about these losses increases, the theory predicts an increase in the optimal level of bank capital. This paper investigates this implication empirically with U.S. Commercial Banks data and finds statistically significant and robust evidence supporting it. A counterfactual experiment suggests that a decline in uncertainty to the lowest level measured in the sample generates an average reduction in bank capital ratios of slightly over 1 percentage point. However, I also find suggestive evidence that the intensity of this precautionary motive is stronger during recessions. From a policy perspective, these results suggest that the effectiveness of countercyclical capital requirements during bad times will be undermined by banks desire to hold more capital in response to increased uncertainty.
International Convergence Of Capital Measurement And Capital Standards
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Author :
language : en
Publisher: Lulu.com
Release Date : 2004
International Convergence Of Capital Measurement And Capital Standards written by and has been published by Lulu.com this book supported file pdf, txt, epub, kindle and other format this book has been release on 2004 with Bank capital categories.
The Right Balance For Banks
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Author : William R. Cline
language : en
Publisher: Peterson Institute for International Economics
Release Date : 2017-06-01
The Right Balance For Banks written by William R. Cline and has been published by Peterson Institute for International Economics this book supported file pdf, txt, epub, kindle and other format this book has been release on 2017-06-01 with Business & Economics categories.
The global financial crisis produced an important agreement among regulators in 2010 to raise capital requirements for banks to protect them from insolvency in the event of another emergency. In this book, William R. Cline, a leading expert on the global financial system, employs sophisticated economic models to analyze whether these reforms, embodied in the Third Basel Accord, have gone far enough. He calculates how much higher bank capital reduces the risk of banking crises, providing a benefit to the economy. On the cost side, he estimates how much higher capital requirements raise the lending rate facing firms, reducing investment in plant and equipment and thus reducing output in the economy. Applying a plausible range of parameters, Cline arrives at estimates for the optimal level of equity capital relative to bank assets. He finds that the optimal capital ratio is about one-third higher than the target set in the Basel III reforms. He also challenges the recent “too much finance” literature, which holds that in advanced countries banking sectors are already too large and are curbing growth. The study provides an extensive review of the literature on bank capital requirements and associated issues such as “too big to fail” incentive distortions and economies of scale in banking.
Bank Lending In The Knowledge Economy
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Author : Mr.Giovanni Dell'Ariccia
language : en
Publisher: International Monetary Fund
Release Date : 2017-11-07
Bank Lending In The Knowledge Economy written by Mr.Giovanni Dell'Ariccia and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2017-11-07 with Business & Economics categories.
We study bank portfolio allocations during the transition of the real sector to a knowledge economy in which firms use less tangible capital and invest more in intangible assets. We show that, as firms shift toward intangible assets that have lower collateral values, banks reallocate their portfolios away from commercial loans toward other assets, primarily residential real estate loans and liquid assets. This effect is more pronounced for large and less well capitalized banks and is robust to controlling for real estate loan demand. Our results suggest that increased firm investment in intangible assets can explain up to 20% of bank portfolio reallocation from commercial to residential lending over the last four decades.
The Effects Of Bank Capital On Lending
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Author : Jose M. Berrospide
language : en
Publisher:
Release Date : 2016
The Effects Of Bank Capital On Lending written by Jose M. Berrospide and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2016 with categories.
The effect of bank capital on lending is a critical determinant of the linkage between financial conditions and real activity, and has received especial attention in the recent financial crisis. We use panel-regression techniques - following Bernanke and Lown (1991) and Hancock and Wilcox (1993, 1994) - to study the lending of large bank holding companies (BHCs) and find small effects of capital on lending. We then consider the effect of capital ratios on lending using a variant of Lown and Morgan's (2006) VAR model, and again find modest effects of bank capital ratio changes on lending. These results are in marked contrast to estimates obtained using simple empirical relations between aggregate commercial-bank assets and leverage growth, which have recently been very influential in shaping forecasters' and policymakers' views regarding the effects of bank capital on loan growth. Our estimated models are then used to understand recent developments in bank lending and, in particular, to consider the role of TARP-related capital injections in affecting these developments.
U S Bank Behavior In The Wake Of The 2007 2009 Financial Crisis
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Author : Mr.Adolfo Barajas
language : en
Publisher: International Monetary Fund
Release Date : 2010-05-01
U S Bank Behavior In The Wake Of The 2007 2009 Financial Crisis written by Mr.Adolfo Barajas and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2010-05-01 with Business & Economics categories.
The paper examines the slowdown of lending by large U.S. banks over the period 2007Q3 - 2009Q2, focusing on: (i) whether capital or liquidity was the binding constraint; (ii) factors influencing banks’ decision to hold capital; and (iii) their pricing behavior. Using quarterly data for the largest U.S. banks, the paper finds that capital, rather than liquidity, constrained lending. Banks took actions to increase capital by slowing lending and raising profit margins, not fully passing through the Federal Reserve’s interest rate cuts. Banks optimally choose capital based on the expected future demand for loans and the marginal cost of capital.