Effects Of Bank Capital Requirements On Lending By Banks And Non Bank Financial Institutions

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Effects Of Bank Capital Requirements On Lending By Banks And Non Bank Financial Institutions

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Author : Peter Bednarek
language : en
Publisher:
Release Date : 2023

Effects Of Bank Capital Requirements On Lending By Banks And Non Bank Financial Institutions written by Peter Bednarek and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2023 with categories.

What is the impact of a sudden and sizeable increase in bank capital requirements on the lending activity by directly affected banks and by non-affected non-bank financial institutions (NBFIs)? To answer this question, we apply a difference-in-differences methodology around the capital exercise by the European Banking Authority (EBA) in 2011 with German credit register data. We find that insurance companies, financial enterprises, and factoring companies - but not leasing companies - and Non-EBA banks expand their corporate lending relative to EBA banks. In particular, NBFIs use the opportunity to expand their credit activities, in riskier and more competitive borrower segments, but NBFIs do not seem to rely on increased bank funding to finance this expansion.

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.

Benefits And Costs Of Bank Capital

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Author : Jihad Dagher
language : en
Publisher: International Monetary Fund
Release Date : 2016-03-03

Benefits And Costs Of Bank Capital written by Jihad Dagher 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 2016-03-03 with Business & Economics categories.

The appropriate level of bank capital and, more generally, a bank’s capacity to absorb losses, has been at the core of the post-crisis policy debate. This paper contributes to the debate by focusing on how much capital would have been needed to avoid imposing losses on bank creditors or resorting to public recapitalizations of banks in past banking crises. The paper also looks at the welfare costs of tighter capital regulation by reviewing the evidence on its potential impact on bank credit and lending rates. Its findings broadly support the range of loss absorbency suggested by the Financial Stability Board (FSB) and the Basel Committee for systemically important banks.

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.

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.

Banks And Capital Requirements

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Author : Benjamin H. Cohen
language : en
Publisher:
Release Date : 2014

Banks And Capital Requirements written by Benjamin H. Cohen and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2014 with Bank capital categories.

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 Size And Systemic Risk

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Author : Mr.Luc Laeven
language : en
Publisher: International Monetary Fund
Release Date : 2014-05-08

Bank Size And Systemic Risk written by Mr.Luc Laeven 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 2014-05-08 with Business & Economics categories.

The proposed SDN documents the evolution of bank size and activities over the past 20 years. It discusses whether this evolution can be explained by economies of scale or “too big to fail” subsidies. The paper then presents evidence on the extent to which bank size and market-based activities contribute to systemic risk. The paper concludes with policy messages in the area of capital regulation and activity restrictions to reduce the systemic risk posed by large banks. The analysis of the paper complements earlier Fund work, including SDN 13/04 and the recent GFSR chapter on “too big to fail” subsidies, and its policy message is in line with this earlier work.

New Perspectives On The Bank Firm Relationship

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Author : Paola Ferretti
language : en
Publisher: Springer
Release Date : 2016-11-14

New Perspectives On The Bank Firm Relationship written by Paola Ferretti and has been published by Springer this book supported file pdf, txt, epub, kindle and other format this book has been release on 2016-11-14 with Business & Economics categories.

This book analyses the connections between the banking industry in Europe and the companies it finances. Ferretti specifically studies how these bonds have evolved over time and questions whether now is the time for a change in the relationship’s dynamics. Chapters discuss the role of bank lending in firms’ financing during the recent financial crisis, as well as issues in credit risk management. The discussion also examines regulatory requirements impacting banks and firms (Basel III) and how they intersect with banks’ internal purposes. Moreover, the book explores how the financial crisis has impacted the relationship between banks and businesses, and seeks to identify the strengths and weaknesses inherent to it. Through this timely discussion, Ferretti looks to the future of the relationship between banks and non-financial organizations to see how they can be revitalised, adapted and reimagined in a post-crisis economy.

The Effects Of Higher Bank Capital Requirements On Credit In Peru

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Author : Xiang Fang
language : en
Publisher: International Monetary Fund
Release Date : 2018-09-28

The Effects Of Higher Bank Capital Requirements On Credit In Peru written by Xiang Fang 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 2018-09-28 with Business & Economics categories.

This paper offers novel evidence on the impact of raising bank capital requirements in the context of an emerging market: Peru. Using quarterly bank-level data and exploiting the adoption of bank-specific capital buffers, we find that higher capital requirements have a short-lived, negative impact on bank credit in Peru, although this effect becomes statistically insignificant in about half a year. This finding is robust to estimating different specifications to address concerns about the exogeneity of capital requirements. The fact that the reform was gradual and pre-announced and that banks were highly profitable at the time could explain the short-lived effects on credit.