Capital structure in banking

Simon Kwan

FRBSF Economic Letter, 2009, issue dec7

Abstract: Capital structure theories seek to explain why businesses choose different mixes of debt and equity to finance their operations. Banking firms represent a special case because of certain unique features in the industry, including a federal safety net and extensive regulation. The financial crisis of the past two years provided another set of special circumstances in which banks needed to raise capital. The preference banks have shown for issuing preferred shares in the private market in favor of government financing can be viewed through the lenses of capital structure theories.

Keywords: Banks and banking; Capital (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (3)

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