Arbeitspapier
Are banks less likely to issue equity when they are less capitalized?
Debt overhang and moral hazard related to risk-shifting opportunities predict that low capitalized banks have a lower likelihood to issue equity. In contrast to this view, for an international sample of bank Seasoned Equity Offerings (SEOs), we show that the likelihood of issuing an SEO is generally higher in low capitalized banks. We provide a series of tests exploring the variation of capital regulation, systemic conditions and market discipline to understand the driving forces behind this result. We find that market mechanisms rather than capital regulation are the primary, key driver of the decision to issue by low capitalized banks.
- Language
-
Englisch
- Bibliographic citation
-
Series: Working Paper ; No. 100
- Classification
-
Wirtschaft
Banks; Depository Institutions; Micro Finance Institutions; Mortgages
Financial Institutions and Services: Government Policy and Regulation
Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
- Subject
-
SEOs
Banking Regulation
Banking Crises
Counter-cyclical capital regulation
- Event
-
Geistige Schöpfung
- (who)
-
Dinger, Valeriya
Vallascas, Francesco
- Event
-
Veröffentlichung
- (who)
-
Osnabrück University, Institute of Empirical Economic Research
- (where)
-
Osnabrück
- (when)
-
2014
- Handle
- Last update
-
10.03.2025, 11:41 AM CET
Data provider
This object is provided by:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Dinger, Valeriya
- Vallascas, Francesco
- Osnabrück University, Institute of Empirical Economic Research
Time of origin
- 2014
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