Does banks’ systemic importance affect their capital structure and balance sheet adjustment processes?

Yassine Bakkar (), Olivier De Jonghe and Amine Tarazi
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Yassine Bakkar: Université de Limoges, LAPE

No 369, Working Paper Research from National Bank of Belgium

Abstract: Frictions prevent banks to immediately adjust their capital ratio towards their desired and/or imposed level. This paper analyzes (i) whether or not these frictions are larger for regulatory capital ratios vis-à-vis a plain leverage ratio; (ii) which adjustment channels banks use to adjust their capital ratio; and (iii) how the speed of adjustment and adjustment channels differ between large, systemic and complex banks versus small banks. Our results, obtained using a sample of listed banks across OECD countries for the 2001-2012 period, bear critical policy implications for the implementation of new (systemic risk-based) capital requirements and their impact on banks’ balance sheets, specifically lending, and hence the real economy.

Keywords: capital structure; speed of adjustment; systemic risk; systemic size; bank regulation; lending; balance sheet composition (search for similar items in EconPapers)
JEL-codes: G20 G21 G28 (search for similar items in EconPapers)
Pages: 61 pages
Date: 2019-03
New Economics Papers: this item is included in nep-acc, nep-ban, nep-cfn, nep-ict and nep-rmg
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Citations: View citations in EconPapers (9)

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https://www.nbb.be/fr/articles/does-banks-systemic ... nce-sheet-adjustment (application/pdf)

Related works:
Journal Article: Does banks’ systemic importance affect their capital structure and balance sheet adjustment processes? (2023)
Working Paper: Does banks’ systemic importance affect their capital structure and balance sheet adjustment processes? (2023)
Working Paper: Does banks’ systemic importance affect their capital structure and balance sheet adjustment processes? (2022)
Working Paper: Does banks' systemic importance affect their capital structure and balance sheet adjustment processes? (2019)
Working Paper: Does banks' systemic importance affect their capital structure and balance sheet adjustment processes? (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:nbb:reswpp:201903-369

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