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RESEARCH PRODUCT
The effectiveness of bank capital adequacy regulation: A theoretical and empirical approach
Juan M. BlancoVíctor E. Barriossubject
FinanceEconomics and Econometricsbusiness.industryEconomic capitalRisk-adjusted return on capitalCapital adequacy ratioFinancial capitalCost of capitalCapital requirementEconometricsEconomicsCapital employedbusinessReturn on capitalFinancedescription
The aim of this paper is to analyse how banking firms set their capital ratios, that is, the rate of equity capital over assets. In order to study this isue, two theoretical models are developed. Both models deal with the existence of an optimal capital ratio; the first one for firms not affected by capital adequacy regulation, the second one for firms which are. The models have been tested by estimating a disequilibrium model using data of Spanish savings banks.
| year | journal | country | edition | language |
|---|---|---|---|---|
| 2003-10-01 | Journal of Banking & Finance |