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Bank capital and lending: An analysis of commercial banks in the United States

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  • Karmakar, Sudipto
  • Mok, Junghwan

Abstract

We evaluate the relationship between capital ratios and business lending of commercial banks in the United States. Using two different measures of capital, we find a moderate relationship between capital ratios and business lending. We also propose an innovative instrumenting technique to overcome common endogeneity problems.

Suggested Citation

  • Karmakar, Sudipto & Mok, Junghwan, 2015. "Bank capital and lending: An analysis of commercial banks in the United States," Economics Letters, Elsevier, vol. 128(C), pages 21-24.
  • Handle: RePEc:eee:ecolet:v:128:y:2015:i:c:p:21-24
    DOI: 10.1016/j.econlet.2015.01.002
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    Cited by:

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    More about this item

    Keywords

    Tier 1 ratio; Capital adequacy ratio; Business lending;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • 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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