 Leverage across firms, banks, and countriesSebnem Kalemli-Ozcan, Bent Sorensen and Sevcan Yesiltas Journal of International Economics, 2012, vol. 88, issue 2, 284-298 Abstract: We present new stylized facts on bank and firm leverage during the period 2000–2009 using internationally comparable micro level data from many countries. We document the following patterns: a) there was an increase in leverage for investment banks prior to the sub-prime crisis; b) there was no visible increase in leverage for the typical commercial bank and non-financial firm; c) off-balance-sheet items constitute a big fraction of assets, especially for large commercial banks in the US, whereas investment banks do not report these items; d) the leverage ratio is procyclical for investment banks and for large commercial banks in the US; e) banks in emerging markets with tighter bank regulation and stronger investor protection experienced significantly less deleveraging during the crisis. The results suggest that excessive risk taking before the crisis was not easily detectable because the risk involved the quality rather than the quantity of assets. Keywords: Leverage; Crisis; International; Banks; Firms (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:inecon:v:88:y:2012:i:2:p:284-298 DOI: 10.1016/j.jinteco.2012.03.002 Access Statistics for this article Journal of International Economics is currently edited by Gourinchas, Pierre-Olivier and RodrÃguez-Clare, Andrés More articles in Journal of International Economics from Elsevier |
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