منابع مشابه
Bank Capital, Agency Costs, and Monetary Policy
Evidence suggests that banks, like firms, face financial frictions when raising funds. The authors develop a quantitative, monetary business cycle model in which agency problems affect both the relationship between banks and firms and the relationship between banks and their depositors. As a result, bank capital and entrepreneurial net worth jointly determine aggregate investment, and are impor...
متن کاملDeposit Market Competition, Costs of Funding and Bank Risk
This paper presents an empirical examination of the effects of both deposit market competition and of wholesale funding on bank risk simultaneously. The traditional view of the relation between competition and risk has focused on the disciplining role of the charter value. In this project we argue that if the structure of bank liabilities and the costs of retail and wholesale funding are jointl...
متن کاملBank capital structure and credit decisions
This paper argues that banks must be sufficiently levered to have first-best incentives to make new risky loans. This result, which is at odds with the notion that leverage invariably leads to excessive risk taking, derives from two key premises that focus squarely on the role of banks as informed lenders. First, banks finance projects that they do not own, which implies that they cannot extrac...
متن کاملRegulating Bank Capital Structure to Control Risk
T he most important recent developments in bank regulation are based on capital requirements. For example, the Basle Accord of 1988 specifies that bank capital must be at least 8 percent of a bank’s risk-weighted assets.1 Also, the Federal Deposit Insurance Corporation Improvement Act of 1991 (FDICIA) requires regulators to shut down a bank whose capital has dropped below a cutoff level. While ...
متن کاملAgency Costs, Risk Management, and Capital Structure
The joint determination of capital structure and investment risk is examined. Optimal capital structure re ects both the tax advantages of debt less default costs (Modigliani-Miller), and the agency costs resulting from asset substitution (Jensen-Meckling). Agency costs restrict leverage and debt maturity and increase yield spreads, but their importance is relatively small for the range of envi...
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ژورنال
عنوان ژورنال: SSRN Electronic Journal
سال: 2019
ISSN: 1556-5068
DOI: 10.2139/ssrn.3411687