The Effect of Higher Capital Requirements on Bank Lending: The Capital Surplus Matters
Dominika Kolcunová () and
Simona Malovana ()
Working Papers from Czech National Bank
This paper studies the impact of higher additional capital requirements on growth in loans to the private sector for banks in the Czech Republic. The empirical results indicate that higher additional capital requirements have a negative effect on loan growth for banks with relatively low capital surpluses. In addition, the results confirm that the relationship between the capital surplus and loan growth is also important at times of stable capital requirements, i.e. it does not serve only as an intermediate channel of higher additional capital requirements.
Keywords: Bank lending; banks' capital surplus; regulatory capital requirements (search for similar items in EconPapers)
JEL-codes: C22 E32 G21 G28 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ban, nep-cba, nep-mac, nep-rmg and nep-tra
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Working Paper: The Effect of Higher Capital Requirements on Bank Lending: The Capital Surplus Matters (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:cnb:wpaper:2019/2
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