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How Do Banks Determine Capital? : Empirical Evidence for Germany

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Author Info
Weber, Martin
Kleff, Volker
Abstract

This paper examines how capital is determined by German banks. We analyse whether the determinants found in the previous empirical literature hold for the special German banking sector with its three characteristic banking groups of savings banks, cooperative banks and other banks. On the basis of a unique data set of nearly all German banks between 1992 and 2001 provided by the Deutsche Bundesbank, we apply the generalised method of moments (GMM) within a dynamic panel data framework. The results largely confirm the findings for other countries, but show considerable differences between the three German banking groups. --

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Paper provided by ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research in its series ZEW Discussion Papers with number 03-66.

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Date of creation: 2003
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Handle: RePEc:zbw:zewdip:1677

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Related research
Keywords: Bank capital; portfolio risk; banking regulation; panel data; GMM;

Find related papers by JEL classification:
G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Capital and Ownership Structure
C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data
G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Mortgages

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