The relationship between risk and capital in Swiss commercial banks: a panel study
AbstractThe relationship between changes in risk and changes in leverage for a panel of Swiss banks is investigated. Using market data for risk and both accounting and market data for capital over the period between 1990 and 2002, a positive correlation is found between changes in capital and changes in risk, i.e., higher levels of capital are associated with higher levels of risk. Despite this positive correlation, however, a significant relationship between the default probability and the capital ratio is not found.
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Bibliographic InfoArticle provided by Taylor & Francis Journals in its journal Applied Financial Economics.
Volume (Year): 14 (2004)
Issue (Month): 8 ()
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