This file is part of IDEAS, which uses RePEc data


[ Papers | Articles | Software | Books | Chapters | Authors | Institutions | JEL Classification | NEP reports | Search | New papers by email | Author registration | Rankings | Volunteers | FAQ | Blog | Help! ]

Capital Management of Deposit Takers: The Impact of Prudential Requirements

Author info | Abstract | Publisher info | Download info | Related research | Statistics
Author Info
Brenton Goldsworthy () (Australian Prudential Regulation Authority)
Carlos Schulz () (Australian Prudential Regulation Authority)
Geoffrey Shuetrim () (Australian Prudential Regulation Authority)

Additional information is available for the following registered author(s):

Abstract

QThis paper explores how the proximity of an instituions's capital-adequacy ratio to the regulatory minimum influences the capital-adequacy ratio observed in the following period. It is shown that banks and credit unions react differently to the prudential constraints. The majority of banks tend to operate with a small buffer of capital above the regulatory minimum; if their capital -adequacy ratio gets too close to the minimum then the bank tends to increase the ratio ove the next year, while if the bank finds itself with a ratio well above the minimum then it is inclined to decrease the ratio. In constrast, the capital-adequacy ratio for many credit unions evolves like a random walk.

Download Info
To download:

If you experience problems downloading a file, check if you have the proper application to view it first. Information about this may be contained in the File-Format links below. In case of further problems read the IDEAS help file. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://www.apra.gov.au/RePEc/RePEcDocs/Archive/working_papers/wp0004.pdf
File Format: application/pdf
File Function: main text
Download Restriction: no

Publisher Info
Paper provided by Australian Prudential Regulation Authority in its series Working Papers with number wp0004.

Download reference. The following formats are available: HTML, plain text, BibTeX, RIS (EndNote), ReDIF
Length:
Date of creation: 01 Jan 2000
Date of revision:
Handle: RePEc:apr:aprewp:wp0004

Contact details of provider:
Postal: 400 George Street, Sydney, NSW 2000, Australia
Phone: +61 (0)2 9210 3000
Fax: +61 (0)2 9210 3022
Web page: http://www.apra.gov.au/

For technical questions regarding this item, or to correct its listing, contact: (Justin Harding).

Related research
Keywords: Capital Ratio Solvency Prudential Supervision Bank

Find related papers by JEL classification:
G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Mortgages
G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation

This paper has been announced in the following NEP Reports:

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Myers, Stewart C. & Majluf, Nicholas S., 1984. "Corporate financing and investment decisions when firms have information that investors do not have," Journal of Financial Economics, Elsevier, vol. 13(2), pages 187-221, June. [Downloadable!] (restricted)
  2. 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.. [Downloadable!] (restricted)
  3. 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. [Downloadable!] (restricted)
  4. Mingo, John J, 1975. "Regulatory Influence on Bank Capital Investment," Journal of Finance, American Finance Association, vol. 30(4), pages 1111-21, September. [Downloadable!] (restricted)
  5. repec:fip:fedreq:y:1988:i:nov/dec:p:28-34:n:v.74no.6 is not listed on IDEAS
  6. Geoffrey Shuetrim, 1998. "Systematic Risk Characteristics of Corporate Equity," RBA Research Discussion Papers rdp9802, Reserve Bank of Australia. [Downloadable!]
  7. Harris, Milton & Raviv, Artur, 1991. " The Theory of Capital Structure," Journal of Finance, American Finance Association, vol. 46(1), pages 297-355, March. [Downloadable!] (restricted)
  8. Jacques, Kevin & Nigro, Peter, 1997. "Risk-based capital, portfolio risk, and bank capital: A simultaneous equations approach," Journal of Economics and Business, Elsevier, vol. 49(6), pages 533-547. [Downloadable!] (restricted)
  9. Geoffrey Shuetrim & Philip Lowe & Steve Morling, 1993. "The Determinants of Corporate Leverage: A Panel Data Analysis," RBA Research Discussion Papers rdp9313, Reserve Bank of Australia. [Downloadable!]
  10. Myers, Stewart C. & Majluf, Nicolás S., 1945-, 1984. "Corporate financing and investment decisions when firms have information that investors do not have," Working papers 1523-84., Massachusetts Institute of Technology (MIT), Sloan School of Management. [Downloadable!]
  11. Tolga Ediz & Ian Michael & William Perraudin, 1998. "The impact of capital requirements on U.K. bank behaviour," Economic Policy Review, Federal Reserve Bank of New York, issue Oct, pages 15-22. [Downloadable!]
  12. Jensen, Michael C. & Meckling, William H., 1976. "Theory of the firm: Managerial behavior, agency costs and ownership structure," Journal of Financial Economics, Elsevier, vol. 3(4), pages 305-360, October. [Downloadable!] (restricted)
Full references

Statistics
Access and download statistics

Did you know? Authors registered on the RePEc Author Service receive monthly emails with details about downloads and abstract views of their works.

This page was last updated on 2008-7-15.

This information is provided to you by IDEAS at the Department of Economics, College of Liberal Arts and Sciences, University of Connecticut using RePEc data on a server sponsored by the Society for Economic Dynamics.