Wealth effects of bank holding company securities issuance and loan growth under the risk-based capital requirements

Elizabeth Laderman ()

Economic Review, 1994, 30-41

Abstract: This paper tests a two-part hypothesis: first, that during the period between publication of the risk-based capital requirements in early 1989 and the end of 1992, bank holding companies (BHCs) faced a statistically significant decrease in stock returns if they issued new common stock; second, that this discouraged new common stock issuance and therefore, in effect, forced BHCs with Tier 1 and/or leverage capital-to-assets ratios below the regulatory minima to decrease loans outstanding more than did BHCs deficient only in their total capital ratios. Empirical evidence supporting both parts of the hypothesis is presented.

Keywords: Bank holding companies; Bank loans; Risk; Bank capital; Bank stocks; Stock - Prices (search for similar items in EconPapers)
Date: 1994
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
https://www.frbsf.org/wp-content/uploads/94-2_30-41.pdf Full Text (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:fip:fedfer:y:1994:p:30-41:n:2

Ordering information: This journal article can be ordered from

Access Statistics for this article

More articles in Economic Review from Federal Reserve Bank of San Francisco Contact information at EDIRC.
Bibliographic data for series maintained by Federal Reserve Bank of San Francisco Research Library ().