Financial institutions’ funding cost: Do capital and risk-taking matter?

Fernando Moreira
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Fernando Moreira: University of Edinburgh Business School, UK

Journal of Risk Management in Financial Institutions, 2020, vol. 14, issue 1, 96-106

Abstract: This study shows that the relative amount of capital and risk-taking compared with peers has influence on the funding cost of financial institutions. This suggests that these two factors could work as tools for achieving financial stability by means of self-regulatory practices given that financial institutions would have incentives to increase capital and refrain from taking excessive risk. Besides contributing to the policy-making debate on the viability of market discipline in banking regulation, this paper also opens avenues for further investigations in this area.

Keywords: funding cost; bank capital; risk-taking (search for similar items in EconPapers)
JEL-codes: E5 G2 (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:aza:rmfi00:y:2020:v:14:i:1:p:96-106

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