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The Effect of Higher Capital Requirements on Bank Lending: The Capital Surplus Matters

Dominika Kolcunová and Simona Malovana

No 2019/5, Working Papers IES from Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies

Abstract: This paper studies the impact of higher additional capital requirements on loan growth to private sector of banks in the Czech Republic. The empirical results indicate that there is a negative effect of higher additional capital requirements on loan growth of banks with relatively low capital surplus. In addition, the results confirm that the relationship between capital surplus and loan growth is important also in the period of stable capital requirements, i.e. it does not serve only as an intermediate channel of higher additional capital requirements.

Keywords: Bank lending; banks’ capital surplus; regulatory capital requirements (search for similar items in EconPapers)
JEL-codes: C22 E32 G21 G28 (search for similar items in EconPapers)
Pages: 47 pages
Date: 2019-04, Revised 2019-04
New Economics Papers: this item is included in nep-ban, nep-cba, nep-cfn, nep-mac, nep-rmg and nep-tra
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Related works:
Journal Article: The effect of higher capital requirements on bank lending: the capital surplus matters (2022) Downloads
Working Paper: The Effect of Higher Capital Requirements on Bank Lending: The Capital Surplus Matters (2019) Downloads
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