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The Determinants of Capital Structure: Some Evidence from Banks

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Author Info
Heider, Florian
Gropp, Reint Eberhard

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Abstract

This paper documents that standard cross-sectional determinants of firm leverage also apply to the capital structure of large banks in the United States and Europe. We find a remarkable consistency in sign, significance and economic magnitude. Like non-financial firms, banks appear to have stable capital structures at levels that are specific to each individual bank. The results suggest that capital requirements may only be of second-order importance for banks? capital structures and confirm the robustness of current corporate finance findings in a holdout sample of banks. --

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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 08-015.

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Date of creation: 2008
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Handle: RePEc:zbw:zewdip:7224

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Related research
Keywords: capital structure; corporate finance; leverage; bank capital; banking regulation;

Find related papers by JEL classification:
G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Capital and Ownership Structure
G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Mortgages

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Cited by:
(explanations, 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. Martin Cihák & Tigran Poghosyan, 2009. "Distress in European Banks: An Analysis Based on a New Dataset," IMF Working Papers 09/9, International Monetary Fund. [Downloadable!]
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This page was last updated on 2009-11-27.

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