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Bank response to capital requirements: Theory and Indian evidence

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Author Info

  • Nachane, D M
  • Narain, Aditya
  • Ghosh, Saibal
  • Sahoo, Satyananda

Abstract

The paper discusses the theory of how banks' respond to risk-based capital standards and conducts an empirical estimation to ascertain the response of banks to capital requirements in the Indian context

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File URL: http://mpra.ub.uni-muenchen.de/17453/
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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 17453.

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Date of creation: 2001
Date of revision:
Publication status: Published in Economic and Political Weekly 4.36(2001): pp. 329-335
Handle: RePEc:pra:mprapa:17453

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Related research

Keywords: capital; banking; India;

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References

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  1. Gennotte, Gerard & Pyle, David, 1991. "Capital controls and bank risk," Journal of Banking & Finance, Elsevier, vol. 15(4-5), pages 805-824, September.
  2. C. H. Furfine, 2000. "Evidence on the response of US banks to changes in capital requirements," BIS Working Papers 88, Bank for International Settlements.
  3. Mingo, John J, 1975. "Regulatory Influence on Bank Capital Investment," Journal of Finance, American Finance Association, vol. 30(4), pages 1111-21, September.
  4. 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.
  5. Frederick T. Furlong & Michael C. Keeley, 1991. "Capital regulation and bank risk-taking: a note (reprinted from Journal of Banking and Finance)," Economic Review, Federal Reserve Bank of San Francisco, issue Sum, pages 34-39.
  6. Allen N. Berger, 1994. "The relationship between capital and earnings in banking," Finance and Economics Discussion Series 94-2, Board of Governors of the Federal Reserve System (U.S.).
  7. Joseph G. Haubrich & Paul Wachtel, 1993. "Capital requirements and shifts in commercial bank portfolios," Economic Review, Federal Reserve Bank of Cleveland, issue Q III, pages 2-15.
  8. Robert B. Avery & Allen N. Berger, 1989. "Loan commitments and bank risk exposure," Finance and Economics Discussion Series 65, Board of Governors of the Federal Reserve System (U.S.).
  9. Arellano, Manuel & Bond, Stephen, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," Review of Economic Studies, Wiley Blackwell, vol. 58(2), pages 277-97, April.
  10. 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..
  11. Rime, Bertrand, 2001. "Capital requirements and bank behaviour: Empirical evidence for Switzerland," Journal of Banking & Finance, Elsevier, vol. 25(4), pages 789-805, April.
  12. Robert B. Avery & Allen N. Berger, 1990. "Risk-based capital and deposit insurance reform," Working Paper 9101, Federal Reserve Bank of Cleveland.
  13. 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.
  14. Furlong, Frederick T. & Keeley, Michael C., 1989. "Capital regulation and bank risk-taking: A note," Journal of Banking & Finance, Elsevier, vol. 13(6), pages 883-891, December.
  15. William R. Keeton, 1989. "The new risk-based capital plan for commercial banks," Economic Review, Federal Reserve Bank of Kansas City, issue Dec, pages 40-60.
  16. Shrieves, Ronald E. & Dahl, Drew, 1992. "The relationship between risk and capital in commercial banks," Journal of Banking & Finance, Elsevier, vol. 16(2), pages 439-457, April.
  17. 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.
  18. 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.
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Citations

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Cited by:
  1. Ghosh, Saibal, 2006. "Monetary policy and bank behavior: Empirical evidence from India," MPRA Paper 17395, University Library of Munich, Germany.
  2. Nachane, D M & Ray, Partha & Ghosh, Saibal, 2005. "The new Basel capital accord: Rationale, design and tentative implications for India," MPRA Paper 17426, University Library of Munich, Germany.
  3. Nachane, D M & Ray, Partha & Ghosh, Saibal, 2004. "The New Basel Capital Accord: A Primer with an Indian Focus," MPRA Paper 17397, University Library of Munich, Germany.

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