Determinants of bank's financing choices under capital regulation

Artikel

This paper analyzes the financing choices of banks under capital regulation during the expansion period that preceded the crisis. We use data from Dealogic on the issuances of financial instruments of Spanish banks to test whether financing choices respond to predictions derived from the corporate finance theory and/or to capital regulation. We find that banks financed their exponential growth with debt instruments and covered the additional regulatory capital requirements from higher risk-weighted assets with the issuance of hybrid instruments. We also find that banks choose the financial instruments that minimize asymmetric information costs.

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• Language: Englisch

References and Relationships

• Bibliographic citation: Journal: SERIEs - Journal of the Spanish Economic Association ; ISSN: 1869-4195 ; Volume: 8 ; Year: 2017 ; Issue: 3 ; Pages: 287-309 ; Heidelberg: Springer

Classification and Topics

• Classification: Wirtschaft ; Banks; Depository Institutions; Micro Finance Institutions; Mortgages
• Subject: Banks ; Capital regulation ; Financing choices ; Informational asymmetries ; Financial markets

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Llorens, Vanesa ; Martin-Oliver, Alfredo
• Event: Veröffentlichung
• (who): Springer
• (where): Heidelberg
• (when): 2017

Further information

• DOI: doi:10.1007/s13209-017-0161-1
• Handle: http://hdl.handle.net/10419/195259