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Bank capital requirements and leverage: a review of the literature

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  • William P. Osterberg
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    Abstract

    An assessment of how banks adjust to increased capital requirements, illustrated by a model of a bank's choice of optimal leverage.

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    File URL: http://www.clevelandfed.org/Research/Review/1990/90-q4-osterberg.pdf
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    Bibliographic Info

    Article provided by Federal Reserve Bank of Cleveland in its journal Economic Review.

    Volume (Year): (1990)
    Issue (Month): Q IV ()
    Pages: 2-12

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    Handle: RePEc:fip:fedcer:y:1990:i:qiv:p:2-12:n:v.26no.4

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    Related research

    Keywords: Bank capital ; Financial leverage;

    References

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    1. Yair E. Orgler & Robert A. Taggart, Jr., 1981. "Implications of Corporate Capital Structure Theory for Banking Institutions," NBER Working Papers 0737, National Bureau of Economic Research, Inc.
    2. Harris, Milton & Raviv, Artur, 1991. " The Theory of Capital Structure," Journal of Finance, American Finance Association, vol. 46(1), pages 297-355, March.
    3. Boyd, John H. & Prescott, Edward C., 1986. "Financial intermediary-coalitions," Journal of Economic Theory, Elsevier, vol. 38(2), pages 211-232, April.
    4. Diamond, Douglas W, 1984. "Financial Intermediation and Delegated Monitoring," Review of Economic Studies, Wiley Blackwell, vol. 51(3), pages 393-414, July.
    5. Deborah Lucas & Robert L. McDonald, 1987. "Bank Portfolio Choice with Private Information About Loan Quality: Theory and Implications for Regulation," NBER Working Papers 2421, National Bureau of Economic Research, Inc.
    6. Lam, Chun H & Chen, Andrew H, 1985. " Joint Effects of Interest Rate Deregulation and Capital Requirements on Optimal Bank Portfolio Adjustments," Journal of Finance, American Finance Association, vol. 40(2), pages 563-75, June.
    7. James B. Thomson, 1986. "The use of market information in pricing deposit insurance," Working Paper 8609, Federal Reserve Bank of Cleveland.
    8. Scholes, Myron S & Wilson, G Peter & Wolfson, Mark A, 1990. "Tax Planning, Regulatory Capital Planning, and Financial Reporting Strategy for Commercial Banks," Review of Financial Studies, Society for Financial Studies, vol. 3(4), pages 625-50.
    9. Kim, Daesik & Santomero, Anthony M, 1988. " Risk in Banking and Capital Regulation," Journal of Finance, American Finance Association, vol. 43(5), pages 1219-33, December.
    10. Sealey, C. Jr., 1985. "Portfolio separation for stockholder owned depository financial intermediaries," Journal of Banking & Finance, Elsevier, vol. 9(4), pages 477-490, December.
    11. William P. Osterberg & James B. Thomson, 1990. "Optimal financial structure and bank capital requirements: an empirical investigation," Working Paper 9007, Federal Reserve Bank of Cleveland.
    12. Pyle, David H., 1986. "Capital regulation and deposit insurance," Journal of Banking & Finance, Elsevier, vol. 10(2), pages 189-201, June.
    13. Buser, Stephen A & Chen, Andrew H & Kane, Edward J, 1981. "Federal Deposit Insurance, Regulatory Policy, and Optimal Bank Capital," Journal of Finance, American Finance Association, vol. 36(1), pages 51-60, March.
    14. Marcus, Alan J, 1983. " The Bank Capital Decision: A Time Series-Cross Section Analysis," Journal of Finance, American Finance Association, vol. 38(4), pages 1217-32, September.
    15. Koehn, Michael & Santomero, Anthony M, 1980. " Regulation of Bank Capital and Portfolio Risk," Journal of Finance, American Finance Association, vol. 35(5), pages 1235-44, December.
    16. Flannery, Mark J., 1989. "Capital regulation and insured banks choice of individual loan default risks," Journal of Monetary Economics, Elsevier, vol. 24(2), pages 235-258, September.
    17. Santomero, Anthony M, 1984. "Modeling the Banking Firm: A Survey," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 16(4), pages 576-602, November.
    18. Bradley, Michael & Jarrell, Gregg A & Kim, E Han, 1984. " On the Existence of an Optimal Capital Structure: Theory and Evidence," Journal of Finance, American Finance Association, vol. 39(3), pages 857-78, July.
    19. Mingo, John J, 1975. "Regulatory Influence on Bank Capital Investment," Journal of Finance, American Finance Association, vol. 30(4), pages 1111-21, September.
    20. Peltzman, Sam, 1970. "Capital Investment in Commercial Banking and Its Relationship to Portfolio Regulation," Journal of Political Economy, University of Chicago Press, vol. 78(1), pages 1-26, Jan.-Feb..
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    Cited by:
    1. Joe Peek & Eric Rosengren, 1991. "The capital crunch: neither a borrower nor a lender be," Working Papers 91-4, Federal Reserve Bank of Boston.

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