How Bank Liquidity and Capital Affect Asset Sales?
نویسنده
چکیده
I examine how bank liquidity and capital affect banks’ behavior in asset sales using data on sales of bank owned real estate. I find that: (1) banks with lower liquidity levels post lower asking prices and receive lower sale prices; (2) banks with lower capital levels post higher asking prices, which then lead to longer time on the market. Further analyses show that the results are unlikely to be driven by omitted variables related to local conditions, property characteristics, or bank characteristics.
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