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Banks’ capital, regulation and the financial crisis

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  • Teixeira, João C.A.
  • Silva, Francisco J.F.
  • Fernandes, Ana V.
  • Alves, Ana C.G.

Abstract

This paper investigates whether regulatory capital requirements play an important role in determining banks’ equity capital. We estimate equity capital regressions using panel data of a sample of 560 banks for 2004–2010. Our results suggest that regulatory capital requirements are not first order determinants of banks’ capital structure. We document differences on the effect of most factors on banks’ share of equity according to the type of bank and to the region of the bank. Finally, we show that the determinants of this share are sensitive to the recent international financial crisis and to a set of regulatory country factors.

Suggested Citation

  • Teixeira, João C.A. & Silva, Francisco J.F. & Fernandes, Ana V. & Alves, Ana C.G., 2014. "Banks’ capital, regulation and the financial crisis," The North American Journal of Economics and Finance, Elsevier, vol. 28(C), pages 33-58.
  • Handle: RePEc:eee:ecofin:v:28:y:2014:i:c:p:33-58
    DOI: 10.1016/j.najef.2014.01.002
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    Cited by:

    1. Brzeszczyński, Janusz & Gajdka, Jerzy & Kutan, Ali M., 2015. "Investor response to public news, sentiment and institutional trading in emerging markets: A review," International Review of Economics & Finance, Elsevier, vol. 40(C), pages 338-352.
    2. repec:ura:ecregj:v:1:y:2018:i:1:p:303-314 is not listed on IDEAS
    3. repec:eee:glofin:v:36:y:2018:i:c:p:1-13 is not listed on IDEAS

    More about this item

    Keywords

    Bank capital; Financing policy; Capital structure; Financial crisis;

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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