An international examination of the economic effectiveness of banking recapitalization

Suleiman Tahir, Emmanuel Adegbite and Yilmaz Guney

International Business Review, 2017, vol. 26, issue 3, 417-434

Abstract: While the literature on capital adequacy and bank recapitalization agrees on the importance of a minimum capital requirement, recurring financial crises across the world do little to suggest that capital adequacy is enough protection for banks, even when they fully comply. By examining the case of regulation compelled banking recapitalizations in a cross-country context (during the period 1990Q1–2016Q2), we scrutinize the effectiveness of banking recapitalization on the economies of recently recapitalized countries. We provide implications for international business research, practice and policy by highlighting the need for countries adopting the Basel capital adequacy framework to pay attention to the peculiarities of their economies, the supporting regulatory mechanisms and their comparative spare capacities.

Keywords: Banking crisis; Financial risk; Bank regulation; Banking recapitalization; International business (search for similar items in EconPapers)
JEL-codes: E44 G21 G28 (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:iburev:v:26:y:2017:i:3:p:417-434

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DOI: 10.1016/j.ibusrev.2016.10.002

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