An Empirical Economic Assessment of the Costs and Benefits of Bank Capital in the Us - read free eBook in online reader or directly download on the web page. Select files or add your book in reader. Download and read online ebook An Empirical Economic Assessment of the Costs and Benefits of Bank Capital in the Us write by Simon Firestone. This book was released on 2017. An Empirical Economic Assessment of the Costs and Benefits of Bank Capital in the Us available in PDF, EPUB and Kindle. We evaluate the economic costs and benefits for bank capital levels in the United States. The framework and analysis is similar to that found in previous studies though we tailor the analysis to the specific features and experience of the U.S. financial system and account for the impact of new financial regulations. The conceptual framework identifies the benefits of bank capital with a lower probability of financial crises, which result in decreased economic output. The costs of bank capital are identified with increases in banks cost of funding, which are passed along to borrowers and result in a lower level of economic output. Optimal capital maximize the difference between benefits and costs or net benefits. Using a range of empirical estimates of net benefits we find that the optimal level of bank capital in the United States ranges from just over 13 percent to over 26 percent.
Benefits and Costs of Bank Capital
Benefits and Costs of Bank Capital - read free eBook in online reader or directly download on the web page. Select files or add your book in reader. Download and read online ebook Benefits and Costs of Bank Capital write by Jihad Dagher. This book was released on 2016-03-03. Benefits and Costs of Bank Capital available in PDF, EPUB and Kindle. 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.
Bank Capital and the Cost of Equity
Bank Capital and the Cost of Equity - read free eBook in online reader or directly download on the web page. Select files or add your book in reader. Download and read online ebook Bank Capital and the Cost of Equity write by Mohamed Belkhir. This book was released on 2019-12-04. Bank Capital and the Cost of Equity available in PDF, EPUB and Kindle. Using a sample of publicly listed banks from 62 countries over the 1991-2017 period, we investigate the impact of capital on banks’ cost of equity. Consistent with the theoretical prediction that more equity in the capital mix leads to a fall in firms’ costs of equity, we find that better capitalized banks enjoy lower equity costs. Our baseline estimations indicate that a 1 percentage point increase in a bank’s equity-to-assets ratio lowers its cost of equity by about 18 basis points. Our results also suggest that the form of capital that investors value the most is sheer equity capital; other forms of capital, such as Tier 2 regulatory capital, are less (or not at all) valued by investors. Additionally, our main finding that capital has a negative effect on banks’ cost of equity holds in both developed and developing countries. The results of this paper provide the missing evidence in the debate on the effects of higher capital requirements on banks’ funding costs.
Benefits and Costs of Higher Capital Requirements for Banks
Benefits and Costs of Higher Capital Requirements for Banks - read free eBook in online reader or directly download on the web page. Select files or add your book in reader. Download and read online ebook Benefits and Costs of Higher Capital Requirements for Banks write by William R. Cline. This book was released on 2016. Benefits and Costs of Higher Capital Requirements for Banks available in PDF, EPUB and Kindle.
The Costs and Benefits of Bank Capital Requirements
The Costs and Benefits of Bank Capital Requirements - read free eBook in online reader or directly download on the web page. Select files or add your book in reader. Download and read online ebook The Costs and Benefits of Bank Capital Requirements write by Gianni De Nicolo. This book was released on 2018. The Costs and Benefits of Bank Capital Requirements available in PDF, EPUB and Kindle. This paper presents empirical evidence on the impact of changes in capital requirements on bank lending, and delivers estimates of their costs and benefits in terms of foregone real GDP growth. The empirical analysis is based on large international datasets at a firm and country level, including data of the 2007-2009 crisis and beyond. I find that an increase in regulatory capital ratios reduces real GDP growth, with this reduction offsetting its benefits in terms of a reduced probability of a banking crisis. This evidence suggests that the net benefits of an increase in capital requirements may be negligible.
