Does banks' systemic importance affect their capital structure and balance sheet adjustment processes?

Arbeitspapier

Frictions prevent banks to immediately adjust their capital ratio towards their desired and/or imposed level. This paper analyzes (i) whether or not these frictions are larger for regulatory capital ratios vis-à-vis a plain leverage ratio; (ii) which adjustment channels banks use to adjust their capital ratio; and (iii) how the speed of adjustment and adjustment channels differ between large, systemic and complex banks versus small banks. Our results, obtained using a sample of listed banks across OECD countries for the 2001-2012 period, bear critical policy implications for the implementation of new (systemic risk-based) capital requirements and their impact on banks' balance sheets, specifically lending, and hence the real economy.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: NBB Working Paper ; No. 369

Classification and Topics

• Classification: Wirtschaft ; Financial Institutions and Services: General ; Banks; Depository Institutions; Micro Finance Institutions; Mortgages ; Financial Institutions and Services: Government Policy and Regulation
• Subject: capital structure ; speed of adjustment ; systemic risk ; systemic size ; bank regulation ; lending ; balance sheet composition

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Bakkar, Yassine ; De Jonghe, Olivier ; Tarazi, Amine
• Event: Veröffentlichung
• (who): National Bank of Belgium
• (where): Brussels
• (when): 2019

Further information

• Handle: http://hdl.handle.net/10419/207748
• Last update: 10.03.2025, 11:41 AM CET